If You Believe BMW and Mercedes Don't Care, Maybe You Believe in Santa Too

BMW and Mercedes-Benz executives and dealers aren't fooling anyone when it comes to the shared importance of their neck-and-neck battle to claim the 2011 luxury-auto sales crown in the U.S. market. The cheerful bells and tinsel provided by their holiday-promotion marketing cover an icy determination to win underneath. The two companies are even vying about their overall capitalization.

"Our approach to market is that of a premium brand," Dan Creed, CMO of BMW of North America, told brandchannel. "We're not going to do a whole lot different in December, just keep our nose to the grindstone."

Mercedes-Benz USA's Mike Slater, vice president of sales operations, seemed similarly nonplussed. "We're not going to do anything crazy just to try to beat BMW," he told brandchannel. Besides, as he put it, becoming the market's No. 1 luxury brand means "you get bragging rights for a few weeks and that's about it."

With Lexus knocked out of contention to repeat as winner for the 12th straight year by its recent supply difficulties, the road has been free for the two German brands to jockey for position. BMW had a clear lead for most of the year, but in November, Mercedes pulled to within 1,500 units as they both notched sales of about 220,000 vehicles for the year to date. BMW's global sales grew by 15 percent for the year to date.

Now, while BMW struggles to supply enough to its dealers of the 2011 version of its high-volume 3 Series — which is being replaced in February by a new version — Mercedes-Benz is stepping on the gas, boosting incentives in November to an average of more than $3,000 a vehicle, territory that BMW already was inhabiting.

Executives of runner-up brands for 2011 are agog at the race. "They're spending money at incentive levels I've never seen before," marveled Ben Poore, head of Nissan's Infiniti luxury division.

Riveted observers also include Kurt McNeil. "They say the race isn't driving their behavior," said the vice president of sales for rival Cadillac, with the voice of one who knows what he might be doing if his brand were vying for first place instead of fourth this year. "But that just doesn't add up."

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