Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Mercedes-Benz's Game-Changing CLA Is a Major Problem for BMW

2014 CLA250 Edition 1. Photo: Mercedes-Benz.  

This could have been BMW's (NASDAQOTH: BAMXF  ) year, when it comes to U.S. luxury vehicle sales. Indeed, in July, Daimler (NASDAQOTH: DDAIF  ) CEO Dieter Zetsche said he didn't expected Mercedes to outsell BMW in 2013. However, that was before the release of the CLA -- Mercedes' impressive, and less-expensive, coupe. Now, thanks to the CLA, Mercedes' sales have surged, and it looks as if BMW could lose the title of top-selling luxury-auto brand in the United States. 

The CLA dominates
For the past two years, BMW won the title of top-selling luxury brand in the U.S., and it hoped to do the same in 2013. Then, Mercedes changed the game and released its CLA, which has a starting MSRP of $29,900. Considering the "cheapest" Mercedes used to be the C-Class Sedan -- which has a starting MSRP of $35,800 -- the CLA's lower entry-point is great news for Mercedes enthusiasts. And a lower entry-point isn't the only thing going for the CLA. 

Thanks to a direct Injection and rapid-multispark ignition, the 2.0-liter turbo four-cylinder engine produces 208 horsepower, and 248 pound-feet of torque, which allows the CLA250 to go from 0 to 60 in 6.9 seconds. Further, the ECO start/stop shuts off the engine when the car is idling, which will save you money on gas. Speaking of gas, the CLA has an estimated fuel economy of 26 mpg city, and 38 mpg highway. Additionally, the CLA is front-wheel drive, but for those who want it, all-wheel drive is available.  

The CLA has been available in the U.S. only since September, but it's already had respectable sales. In November, Mercedes reported that it sold 3,623 CLAs, and year-to-date U.S. sales for the model were 10,828. More importantly, strong CLA sales helped extended Mercedes' lead over BMW, by 7,610 vehicles.

The new BMW 3 Series Gran Turismo – M Sport Package. Photo: BMW.

BMW's comeback option
In November 2012, Mercedes was ahead of BMW when it came to U.S. luxury-vehicle sales. Then, BMW unleashed its December sales initiative and ended up taking the luxury sales crown for 2012. This year, however, BMW doesn't have a sedan that can compete with the CLA's price -- BMW's lower entry-point 1 Series is a two-door coupe, while the more comparable 320i sedan has a starting MSRP of $32,750.  

Moreover, U.S. CLA sales are still surging, and December could turn out to be a very impressive month for Mercedes. Plus, the Automotive Leasing Guide just released a study where it reported that a three-year old CLA will have the highest residual value of any compact car in the premium segment. That's great news for the CLA, and Mercedes.

What to watch
The title of top-selling luxury auto-brand in the U.S. is a highly coveted crown, and BMW could pull something out of the bag at the last minute -- like it did last year. But, with Mercedes seeing such strong sales, BMW would be hard-pressed to overtake Mercedes' lead. So, while it's not over until Dec. 31, it seems likely that Mercedes will win the title. That's great news for Mercedes, and its investors, but not great news for BMW. However, losing the title won't devastate BMW as a company. It still has an incredibly strong brand, and offers investors significant potential. But the loss of the top-selling vehicle title isn't great news, either. Consequently, this is something investors should watch.

Mercedes' sales are surging and so is this
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, The Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Read/Post Comments (5) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 09, 2013, at 6:38 PM, gonzo1 wrote:

    The advertising campaign for the roll out of this product was superb, it got my interest and I've never owned a Mercedes.

  • Report this Comment On December 09, 2013, at 10:37 PM, djj711 wrote:

    i am an avid reader of this website, at least a few articles a day. this was probably the most poorly written and semi-biased article that i have ever read on this site.

    the writer refers to the CLA as a coupe, which it clearly is not. she also makes it sound as if BMW will be going out of business once they lose that sales crown. i have seen one CLA on the road since it launched. that sub $30k starting price is a marketing ploy. once you add in the mandatory destination fee of $925, you wind up paying closer to $31,000 plus tax and tags. this is about the same amount you would pay for a BMW 320i, according to, which looks at actual transactions. gas mileage is the same if not better for the 320i.

    i do not own either car type. consumer reports consistently rates BMW higher than Mercedes on most of their metrics, across all model types.

    just some little tidbits. details like this are important when you are comparing two products. two paragraphs were dedicated to explaining how great the CLA's engine, mpg's and technology are. not a single spec was written about BMW.

  • Report this Comment On December 10, 2013, at 12:30 AM, ckgod wrote:

    In comparison BMW's 1 series is a total failure. Not that it's not a good car just it does not get people excited like the CLA does.

  • Report this Comment On December 10, 2013, at 1:37 AM, smithy007 wrote:

    djj711 for being such an avid reader you've clearly missed some key points. Mercedes itself calls the CLA a coupe. Check out its website. The MSRP listed for all vehicles is from the company's respective websites. And the writer clearly states that BMW is a great company that WON'T be devastated by losing to Mercedes. Just some tidbits. Details like these are important.

  • Report this Comment On December 10, 2013, at 3:56 AM, IpraytoCrom wrote:

    The real problem for BMW is not Mercedes. The problem is that, rather than continue the amazing trend setting sport ordinated tradition, BMW is trying to be more like Lexus. BMW, has got rid of the hydraulic steering, soften their suspensions, and have done a lot of sound dampening. BMW wants to steal customers from Lexus and from the rest of the luxury segment. This has upset a lot of BMW die hards, It's not fun to drive BMW's new models. The E36 was the best.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2756674, ~/Articles/ArticleHandler.aspx, 9/27/2016 3:07:00 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 5 hours ago Sponsored by:
DOW 18,094.83 -166.62 -0.91%
S&P 500 2,146.10 -18.59 -0.86%
NASD 5,257.49 -48.26 -0.91%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 3:19 PM
BAMXF $82.61 Down -2.15 -2.53%
BMW CAPS Rating: *****
DDAIF $69.79 Down -1.51 -2.12%