Mercedes-Benz won't sell small car in U.S.

PARIS, Sept 29 (Reuters) - DaimlerChrysler's premium brand Mercedes-Benz won't sell a small car in the United States even though consumers in the world's biggest car market are clamouring for fuel efficiency, a top Mercedes official said.
"In the U.S., Mercedes is perceived as a luxury car," Mercedes Car Group sales and marketing chief Klaus Maier told Reuters at the Paris car show, stressing his group did not want to dilute the brand by moving too far down market.
Maier said a 6-cylinder C-Class Mercedes-Benz -- a posh car in Europe -- was seen as an entry-level model for the brand in North America.
Exchange rates also play a role in the company's calculations. Mercedes originally dropped plans to market its German-made B-Class car in North America because the strong euro made sales there unattractive.
"You have to consider very carefully whether the investment to introduce the B-Class (in North America) would pay off," he said, pointing out that the car, launched in Europe last year, would be two years old by the time it reached America.
Mercedes does not sell its even smaller A-Class car in North America, although it will launch its two-seat Smart car in major U.S. cities in 2008.
Chrysler, the U.S. arm of the world's fifth-biggest carmaker, has been suffering from U.S. consumers' sudden aversion to inefficient light trucks and sport utility vehicles, on which it depends for the bulk of its sales and profits.
Chrysler has been negotiating with potential partners to build a subcompact model that it cannot afford to develop on its own and a decision is due by year's end.
It also is launching more fuel-efficient models in a bid to capture consumer demand and compete with Asian rivals whose more economical cars are in favour.
Maier ruled out selling a Mercedes-Benz model under the Chrysler brand in North America.
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