Mercedes-Benz to Launch GLK Small SUV in January

(MoneyWatch)  With the drama surrounding the Detroit Big Three automakers in Washington, it's easy to forget life goes on for the rest of the auto industry. Mercedes-Benz USA, for instance, is about to launch the GLK350 small SUV in January 2009, as an early 2010 model. A four-wheel-drive version follows in April 2009. The GLK gets a moderate starting price, by Mercedes-Benz standards, of $33,900.

It's a tough time to be introducing a new SUV, with memories still fresh of gasoline at $4 per gallon, but potentially a good time to offer a less-expensive vehicle. Under the skin, the GLK is based on the C-Class sedan, the Mercedes-Benz entry-level car for the U.S. market. It's the smallest Mercedes-Benz SUV ever. The six-cylinder GLK gets an EPA-estimated 16 mpg city/22 mpg highway for the two-wheel-drive version, similar to a six-cylinder car. The company expects 70 percent of GLK buyers will be new to the brand. Mercedes-Benz also expects to attract some buyers downsizing from bigger vehicles.

BNET Auto Industry Analyst Jim Henry interviewed Steve Cannon, Mercedes-Benz USA vice president of marketing, at a press introduction for the GLK in Santa Barbara, Calif. on Dec. 4. Here are edited excerpts: BNET Auto: What have you done to drum up advance interest in the GLK? Anything unusual, since the target is younger, maybe less affluent? We did SEMA, which is the first time we've done that, we wanted to do something that pushes the envelope a bit, especially for a younger demographic who might look and say, "Wow, I never would have expected Mercedes to do this," even if that audience is not our typical buyers. (SEMA is the Specialty Equipment Manufacturers Association, which has a renowned trade show for aftermarket suppliers and customizers. Mercedes-Benz USA commissioned four souped-up and/or blinged-up GLKs to display at the SEMA show in Las Vegas last month.)

BNET Auto: Young is a relative term. The average age for GLK owners might go down slightly, but only slightly, right? Our (advertising) agency came back with what they considered some quote-unquote "Youth" stuff, and I sent them back. I believe the demographic spread for this vehicle is going to be all over the board ?€" sure, including some young, upwardly mobile families who are 30-somethings, but also Baby Boomers.

BNET Auto: When there's a new-car launch, there's usually a single-biggest advertising event, like some big sporting event, or the Super Bowl or something, that represents a big single chunk of the ad spending. What's that going to be for the GLK? Considering the timing, maybe NCAA basketball? There is a big sports buy, we will have a big presence at the NCAAs. That's the male audience that we feel like we have to get. The GLK was already in the "Sex and the City" movie in early summer (2008), which had a good female demographic. It's pretty well integrated into the movie, I've had people come up to me and say they remember seeing it in the movie.

BNET Auto: With everything that's going on in the credit markets, is Mercedes-Benz Financial still offering leases? They are, right? Will there be an advertised lease payment as part of the launch? $499 a month? $399 a month, something like that? MB Financial is still approving applications, still leasing, their approval rate is still as high as ever. They are attaching a few more conditions, but everybody is. I can't give you a number right now, but a sub-$500 lease payment is definitely part of the plan.