Monday, February 07, 2005

Revenge of the Weak Dollar

Mercedes unexpectedly decided today not to launch the new B-Class compact in the US because of the weak exchange rate between the dollar and the Euro. Interestingly, the company will continue with B-Class launches in both Canada and Mexico. While exchange rate concerns are certainly a factor in this decision, they are far from the only one. Mercedes has been increasingly uncertain about the small wagon's prospects in the U.S. market, and for good reason. The C-coupe was never a big seller and other European makes have had problems pushing their small cars. The truth is American's don't traditionally buy expensive small cars. That's why it will be interesting to see how the upcoming A3 sells. If it's well received, Mercedes and BMW might reconsider their decisions not to import the 1-Series and B-Class. Hopefully they do.

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