Stronger residuals—for automakers, the key to offering attractive leasing options, especially for entry-luxury models like the Mercedes-Benz C-Class.
Mercedes-Benz's residuals haven't been as good in recent years as those of other luxury automakers, but it's a trend it hopes to reverse with the upcoming 2012 C-Class, which gets stronger tech content, as well as a new standard turbocharged four-cylinder model, the C250, that achieves 30 mpg highway.
According to the residual value experts at ALG, Mercedes-Benz residual value forecasts have been declining since 2002—by 2010 falling to 45 percent on a brand sales-weighted basis. The C-Class hit a low of 45 percent in 2007 (the last year of the previous-generation model) and has been on the upswing, recovering to 47 percent in 2010.
M-B values recovering
"If you look at that, we are very confident that our C-Class in the used-car market will further stabilize," said Glaser, pointing to the fact that the new model delivers 15-percent better fuel economy while matching or exceeding the performance of the outgoing C300. The automakers is even planning to sell nearly half of the 2012 C-Class models with the new four.
ALG does expect that C-Class residuals will rise slightly, though there's reason to be cautious as the company's predictions for the 2005-2007 models ended up being somewhat higher than the actual cars' three-year value retention in the market.
Bringing a four-cylinder engine back to the lineup for 2012 likely isn't without concern to the automaker. The last time a four-cylinder engine was offered in the C-Class—through model year 2005—the base C230 Kompressor coupe had particularly low resale values (a survey of a few sites shows current average values for 2005 C230 Coupes to be around $10,000).
While the former C-Class Coupes were price leaders, the new 2012 C-Class Coupe is expected to be priced slightly above the sedan.
The 2012 C-Class—in addition to new interior and exterior details—gets a strong new list of tech and telematics features, including Bluetooth audio streaming, text-message display, a center-armrest USB port, and 3D displays, plus active-safety features such as Attention Assist, Adaptive Highbeam Assist, Parking Assist, Parktronic, Lane Keeping Assist, and Blind Spot Assist.
Fours no longer a market liability
Four-cylinder engines aren't the market liability they were just a few years ago, either. But according to Eric Lyman, ALG's director for Residual Value Solutions, final pricing strategy—not yet announced—is crucial.
"Going forward, ALG expects smaller displacement engines to become more prevalent in the luxury space," said Lyman. "Even high performance sports car variants are dropping cylinders and adding turbo/superchargers in an effort to appeal to consumers' performance demands as well as appease regulatory and consumer trends calling for lower emissions and better fuel economy."
source: thecarconnection
