Building the Mercedes brand

The German luxury brand has had its ups and downs, but the period has seen the brand capture the Thai market and enjoy the largest growth, especially with its W123 model that was assembled locally. 

In 1992, when the Anand Panyarachun government liberalised the auto market, there was an influx of CBU (completely built up) imports. This served as a strong boost for the Benz population in Thailand. Apart from those vehicles sold by authorised dealers appointed by the distributor, which was Thonburi Automotive Assembly Plant (TAAP), a small number of independent importers also offered Mercedes-Benz cars. 

However, another high for the Mercedes-Benz brand in Thailand was the sales of imported used cars. At first there were both right- and left-hand drive models, the latter being modified into right-hand-drive in Thailand. Many car importers of those days have grown into major independent importers today or into authorised dealers for many car brands, including Mercedes-Benz. 

Until today, one of the main rivals for Mercedes-Benz – which later took over distribution from TAAP – is not other brands but independent importers that have been growing continuously. For certain models, sales by independent importers are even higher than those seen by distributor Mercedes-Benz (Thailand) Co Ltd (MBT). I have said many times that apart from the loophole in the Thai law, the parent company in Germany appears not to be serious about cross-border sales, despite the huge effort by MBT executives to disrupt these importers. 

But the society isn’t a big one. Certain MBT employees and independent importers of some authorised dealers need to make profits and this has caused information or “movements” to leak out. There’s not much they can do about it too. 

Just last week Mercedes launched the new A-Class in Thailand, which is initially imported as a CBU. There are two engine choices – 1,600cc and 2,000cc that is beefed-up with AMG tuning and suspension. 

The interesting thing about the A-Class is the retail priced, which is lower than Bt2 million. This might seem like a ploy by MBT to prevent independent importers from beating this price too easily. But on the other hand, we must not forget that Benz’s arch rival BMW has the X1 model that is also priced below Bt2 million. Although the A-Class and the X1 may not be direct competitors considering their body styles, whenever two models from these brands are priced similarly, they become instant rivals. This is why price is so important. 

Actually the real opponent of the new A-Class may not be a car, but the damaged emotions of customers of the old A-Class, which was once offered in Thailand but was not successful. That was because in terms of design and driving character, the old A-Class felt more like a car fit for a housewife to drive her kids to school or to the market.