Mercedes’ new W222 S-Class is decimating its European and Asian rivals. A renaissance for a declining sector or the final gasp? Driven to write investigates.
The S-Class is the quintessential Mercedes and the centre of gravity around which the entire Stuttgart-Untertürkheim behemoth pivots. None more so than today’s W222 series; which if current sales are a reliable barometer, is shaping up to be the fastest selling iteration in the model’s history. Since its launch last year, sales have massively outperformed expectations. In a declining sector, haemorrhaging volume to upmarket SUVs, the S-Class’ sales renaissance suggests the full-sized luxury saloon is putting up a credible rearguard action against the dying of the light.
Well, on the surface it does – European sales have risen 152% over the same January-September period last year; a 60% stronger performance than closest sales rival, Audi. The figures make excellent reading for Daimler, with the S-Class accounting for a staggering 42% of the entire luxury limo sector, selling well over double its Ingolstadt rival. Performing at a similar level as Audi, Porsche’s Panamera has seen a 14% upswing in Europe during 2014, giving it third spot overall, well ahead of segment stalwarts; BMW, Jaguar and Lexus.
Across the Atlantic, a similar story has unfolded. With US sales of 22,444 over the January to November period, sales have risen 96% in twelve months. Even more remarkable is the fact that the S-Class has outperformed the combined total of its closest three luxury saloon rivals – all of whom – (Porsche excluded) have posted significant sales declines. With volumes like this, everyone else really ought to consider packing up and giving basketweaving a try. The Mercedes is proving a huge hit everywhere – 50% of sales going to China. The United States accounts for 25%, followed by Germany, where one in ten S-Classes are sold.
These are phenomenal figures for a high-end luxury saloon at a time of unprecedented austerity throughout Europe and amid signs of a weakening Chinese economy. The question is whether it is sustainable? The S-Class is a new model from the acknowledged masters of the form. Rivals like Audi’s A8, BMW’s 7-Series, Jaguar’s XJ and Lexus’ LS are each well into their product cycles and can be expected to lose sales to the new luxury car king. They can equally be expected to regain some lost volume once new models come on stream.
But behind the sales figures, a worrying stratification is taking place. Any significant rise in luxury saloon sales at this altitude can only be attributed to the fresh appeal of the S-Class. Remove it from the equation and the picture is considerably less vibrant. Yes, there have been sales rises elsewhere in the segment during 2014, but from a very low baseline. What is blindingly evident is that the S-Class owns the sector now, approaching 50% of its entire volume; a heavy load for one model to carry. Currently in its first flush of youth, the W222 is a sales sensation and as Mercedes-Benz continue to roll out more derivations, sales can only continue to increase. But when its appeal begins to falter – as it inevitably will, the sector is likely to shrink alarmingly, given their rivals’ inability to seriously rival Sindelfingen’s finest.
For the likes of Jaguar, VW and (in Europe at least) Lexus, surely the only justification for continuing to offer a putative rival to the S-Class is one of prestige? Given the volumes they are currently attracting, and even taking into account the generous margins available to them, it cannot be economically viable to continue making full-sized luxury saloons so few want to own.
While it is tempting to view W222’s dominance as being the beginning of a new reign for the all-conquering S-Class, it may actually prove to be the model’s swansong. At some point in the not too distant future, luxury SUVs will eclipse the sales of these limousines and once that tipping point is reached, the fall is likely to be rapid. Meanwhile the current market imbalance, as manifested by swathe the W222 has voraciously cut through the segment, can only accelerate the process.
Sources/data – ANDC/JATODynamics via Left-Lane.com/Goodcarbadcar.net