Here's a lot of information about Mercedes' Coronavirus Financial Relief and New Car Incentives.
German luxury automaker Mercedes-Benz is doing its part to help those affected by COVID-19, either directly or indirectly, by offering financial relief to existing customers in the form of payment deferrals. The company has also offered up its European manufacturing facilities to produce much-needed medical equipment to treat patients that contract the virus. Mercedes is even leveraging its various social media platforms to educate the public on COVID-19 and share positive messages with its 50 million followers.
Following is a rundown of Mercedes-Benz coronavirus financial relief efforts as well as a summary of the brand’s new car incentives designed to boost flagging sales. We’ll also take a look at how the virus is affecting Mercedes operations here in the U.S. as well as the brand’s outlook for the year.
Mercedes-Benz Customer Relief Programs
To help those who may be experiencing financial hardship due to the coronavirus, Mercedes is offering payment deferrals to existing customers who financed or leased through the company’s captive finance arm, Mercedes-Benz Financial Services (MBFS).
The company did say that, rather than calling the client care line and having to wait, customers should log into their account on the MBFS website and follow the instructions on the home page to request a deferral. Mercedes has not stated publicly for how many months customers may defer payments.
Mercedes-Benz New Car Incentives
Mercedes has not announced any new-vehicle incentives as a direct result of the coronavirus, but the automaker has stepped up efforts to draw attention to its current, existing special offers in hopes that it might grab some incremental sales.
As part of its “Spring Event” promotion, Mercedes is currently offering zero-percent (APR) financing for up to 36 months on most new models for customers who finance through Mercedes-Benz Financial Services. Additionally, the automaker is offering a 90-day first-payment deferral program on any new model. Both programs run through April 30, 2020.
Also, to protect both its customers and dealership employees, Mercedes is increasing its level of online interaction, as well as offering vehicle pick-up and drop-off for service customers.
Mercedes-Benz Factory Closures
One of several European automakers that also produce vehicles in the United States, Mercedes announced on March 17 that it would suspend the majority of its production in Europe. The German luxury automaker initially said the stoppage would last for two weeks, but the worsening of the COVID-19 pandemic has forced the company to further extend that date. No date for the resumption of production has been announced.
Mere days after shutting most European operations, Mercedes announced that, effective March 23, it would halt production at its two U.S. vehicle assembly plants as well, both for the safety of its workers and to help keep inventory levels in check.
In Vance, Alabama, where the automaker produces the GLE, GLS, GLE Coupe, and C-Class sedan, more than 3,700 workers will be furloughed. Also closed is the Charleston, S.C., plant, which builds the Sprinter full-size van. The two U.S. plants are currently set to resume production on April 20, though that date seems unlikely given the continued spread of the coronavirus to rural areas in the South.
Mercedes-Benz Economic Outlook & Sales Forecast
With a diverse lineup of cars and SUVs (and even a couple of vans), Mercedes-Benz is fully entrenched in the U.S. luxury auto market. In fact, the brand was the luxury sales king in this country as recently as 2018, before German rival BMW stole its crown in 2019. With 316,094 sales in the U.S. last year (excluding Sprinter and Metris vans), Mercedes finished a close second to BMW, which sold 324,826 units.
Mercedes brand vehicle sales were off to a strong start in 2020, bolstered by its comprehensive lineup of SUVs, many of which are recently refreshed or all-new. Then, the coronavirus pandemic took hold, resulting in supply disruptions and a severe slowdown in dealer showroom traffic that affected sales. When the smoke cleared, Mercedes ended the first quarter down 4.3%. Disappointing for sure, but it could have been much worse.
Looking forward, it’s tough to say how Mercedes – or any brand, for that matter – will fare the rest of the year simply due to the uncertainty surrounding COVID-19. At the beginning of the year, J.D. Power had forecasted industry sales of 16.9 million, but has since reduced that estimate to 12.1 to 14.8 million units, depending on what happens with the coronavirus.