Mercedes-Benz GLA Supply Shortage To Constrain Sales Photo:
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Tony O'Kane | Apr, 14 2014 | 6 Comments

Last week Mercedes-Benz launched its first compact SUV - the GLA-Class - in Australia, with two more models set to arrive later in the year to bulk out the range.

From now until July, the front-wheel drive diesel GLA 200 CDI will be the sole offering. The 155kW petrol all-wheel drive GLA 250 will join it in July, while the 265kW GLA 45 AMG will arrive in October.

The GLA's arrival finally grants the German automaker entry to the small SUV segment, where Audi and BMW already have established products in the form of the Q3 and X1.

“My team and I have been waiting very eagerly for the launch of our first compact SUV," said Mercedes-Benz Australia CEO Horst von Sanden.

"We have been suffering for many years as you know, and we finally have something to offer in this segment. We’re very excited that this is the start of something new."

But while Benz can now compete in the segment, supply shortages will put a ceiling on sales - at least for the short term.

For 2014, Mercedes-Benz doesn't expect to sell more than 1000 units of the GLA across all grades, largely thanks to strong global demand for the German-built SUV.

"We could easily sell probably twice that," Mercedes-Benz Australia Senior PR Manager David McCarthy said to TMR at the local launch of the GLA 200 CDI.

"Next year I believe it’ll be somewhere between 1500 and 2000, but we don’t know yet.

"We’d love more, but we simply can’t get more. It’s a situation we don’t really want to be in, but other markets are in the same position."

At $47,900 for the entry-level GLA 200 CDI, the GLA is in a good position to steal sales from the $47,500 Audi Q3 2.0 TDI 103kW and the $46,300 BMW X1 sDrive18d, given it offers a higher level of standard equipment (such as a reversing camera, sat nav and power tailgate) than either.

But with just 1000 cars to sell this year, the GLA won't be challenging either for top slot in the segment. The Q3 (above) currently leads with 253 sales last month, while the X1 notched up 170.

Year-to-date, the Q3 commands 53.9 percent of the small luxury SUV market.

And despite there being more variants of the GLA available overseas, Mercedes-Benz's local arm decided not to bring in a lower-output price leader for the GLA range.

"We decided that because our volumes were going to be lower, that let’s go for the models that will meet the majority of needs for the customer," McCarthy said

"Could we have brought in a cheaper GLA? Absolutely, but we are a premium brand and people expect a premium product.

"If you tried to bring the car in at a lower price, you could take a lot of kit out - like the Easy-Pack tailgate. The cost of that is probably about $1000, but we believe people want that feature in that car."

But unlike the A-Class (below), which was also stymied by poor initial supply and had long waiting lists, Mercedes expects demand for the GLA to be cooler.

Waiting lists will be shorter as a result, with a GLA 200 CDI expected to take two or three months from order to delivery.

A-Class supply has dramatically improved since launch, and the model now convincingly leads the small luxury segment with in excess of 1300 sales so far this year. When supply problems ease up, the GLA could also find itself in a similar position.

"Every one of our [compact] vehicles has a waiting list except for B-Class. You always want to have one less car than you can sell than one more," McCarthy told TMR.

"We’re in the situation where the demand is significantly higher than our ability to satisfy it for A-Class, GLA and CLA."

MORE: Mercedes-Benz GLA Revealed
MORE: Mercedes-Benz GLA45 AMG Revealed

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