Markets

Christmas Spirit in October: Mercedes-Benz, Lexus Duke it Out for No. 1 in U.S.

By Jim Henry

Updated on: October 5, 2010 / 2:17 PM EDT / MoneyWatch

Look for Christmas to come earlier than ever this year, because for the first time in years, Mercedes-Benz (DDAIF.PK) has made a horse race out of the contest with Lexus (TM) to be the No. 1-selling luxury brand in the United States. That makes it highly likely that the two luxury heavyweights will uncork their usual holiday season incentives earlier rather than later.

After a successful September, Mercedes-Benz outsold Lexus, at 165,362 year to date for Mercedes-Benz, versus 162,438 for Lexus, according to AutoData. At the end of eight months, Lexus, the perennial U.S. sales champion, was leading Mercedes-Benz for the year by only 794 units.

Lexus sales are up this year, just not as much as Mercedes-Benz sales. It's possible that Toyota's recall problems maybe dented the Lexus brand image, too. In the meantime, Mercedes-Benz has a lot of new models, including a relatively new version of its bread-and-butter model, the Mercedes-Benz E-Class sedan.

That rivalry is going to make Christmas come early for luxury-car buyers, because Lexus isn't going to take that challenge lying down after most of a decade with Lexus as the No. 1 luxury brand. Mercedes-Benz isn't going to pass up a chance, either, for Mercedes-Benz to be the nation's No. 1-selling luxury brand for the first time since 2000, even though the company lets on like being No. 1 isn't important.
Lexus will defend its bragging rights by rolling out its annual Lexus December to Remember promotion, and probably earlier than ever. Advertising for the Lexus promotion seems to come out ahead of Thanksgiving by a bigger margin every year.

You know the ads, where family members surprise one another with a car, with a big red bow on the roof. That may not be very realistic for most car buyers, but it's memorable, and the promotion works. Luxury-import sales always take off in December, even if few people actually buy a Lexus as a gift for someone else, because that's when the best bargains are.

All the luxury import brands typically put on a last-minute sales spurt in December. That's partly because they want to try and hit their sales targets for the calendar year, and, well, partly because everybody else is doing it.

The December fling has also become an annual tradition because of leasing. Luxury-car customers are much more prone to lease their cars, and if they lease a car in December, chances are their lease will also expire in December three or four years down the road.

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Photo: Lexus