Daimler Struggles to Meet Demand on Premium-Market Record

Daimler AG, the world’s third-largest maker of luxury vehicles, said it’s having trouble filling orders as all-time-high August sales put premium-car manufacturers on course for record full-year deliveries.

“We have a luxury problem,” Chief Executive Officer Dieter Zetsche said today at an International Motor Show press briefing in Frankfurt. “We have a shortage of capacity and cannot fully satisfy global demand.”

New models at Daimler’s main Mercedes-Benz brand and larger competitors Bayerische Motoren Werke AG and Audi AG are propelling delivery gains at the German luxury-vehicle producers, in contrast to declines at European mass-market carmakers amid a recession. Industry sales in the region, which are at a two-decade low, have “bottomed out, and there can be some improvement for the rest of the year,” Zetsche said today.

Mercedes said in August that it hired 4,500 vacation-period workers to keep up production volume during the summer holiday season, with extra hours to build more A-Class and B-Class compacts in Rastatt, Germany, and additional sport-utility vehicles in Tuscaloosa, Alabama.

Labor Talks

The Rastatt plant has a program in place for 21 additional shifts January through November this year, Andreas Renschler, head of manufacturing at Mercedes, said today at a Frankfurt press conference. The company is in talks with the works council on more flexibility in schedules to add or subtract hours based on car-sales changes, he said.

Daimler rose 2.3 percent to 55.98 euros as of 4:41 p.m. in Frankfurt trading, heading for the highest closing price since Feb. 14, 2011. BMW gained 1.6 percent to 79.38 euros, the highest since at least 1992. Volkswagen AG, Europe’s biggest carmaker and Audi’s owner, jumped 4.3 percent to 178.30 euros, the biggest gain in almost a year, based on closing prices.

Zetsche has a strategy for Mercedes to roll out 13 models with no predecessor in eight years in a bid to overtake top-ranked luxury-car manufacturer BMW in sales by the end of the decade. That compares with moves by Munich-based BMW to maintain industry dominance by bringing out 25 models in the two years through 2014, with 10 having no predecessor.

Mercedes Sales

Global deliveries at Mercedes last month jumped 19 percent from a year earlier to 108,417 cars and SUVs, a record for an August, Stuttgart-based Daimler said on Sept. 5. Growth was boosted by an 85 percent surge in demand for the compact models and a 28 percent gain for the E-Class sedan following a revamp of the model starting in April.

BMW also said today that group sales were the highest ever for an August, with a 15 percent jump to 139,648 vehicles. Growth was boosted by a 39 percent surge in sales of the 3-Series car, which BMW started overhauling in early 2012. A Gran Turismo version was added earlier this year.

Eight-month sales at both BMW’s main brand and at Audi, a division of Volkswagen AG, exceeded 1 million cars and SUVs for the first time. August deliveries by Audi increased 9.8 percent to 118,650, the Ingolstadt-based company said yesterday. New models this year include a sedan version of the A3 hatchback that the carmaker predicted will be the vehicle’s best-selling variant, as well as the high-performance RS 5 sports coupe.

Volume Revival

Volume producers including PSA Peugeot Citroen, Europe’s second-biggest carmaker, and Ford Motor Co. have also said at Frankfurt show press conferences that demand for autos in the region has stabilized and may be reviving.

“There are no major signs of uptick, but it does feel like we’re running along the bottom” of the European car-market contraction, Stephen Odell, head of Dearborn, Michigan-based Ford’s business in the region, said yesterday. Peugeot CEO Philippe Varin forecast today that there will be “slightly positive growth” in European auto-industry sales next year.

“A moderate recovery of 2 percent to 3 percent next year would be logical, as we’ve now attained a basic level of car replacement and the economy of some southern countries shows signs of improvement” in Europe, Juergen Pieper, an analyst at Bankhaus Metzler, said today by phone.

“I definitely see a lightening in mood among automotive executives compared with the Geneva car show” in March, said Frank Schwope, a Hanover, Germany-based analyst at NordLB.

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