Daimler sees 'possibility' of overtaking BMW in U.S.

Daimler AG said its Mercedes-Benz brand may be able to overtake Bayerische Motoren Werke AG for second place in luxury-auto sales in the U.S. and in China.

"That is a possibility," Chief Executive Officer Dieter Zetsche said today in a Bloomberg Television interview. Toyota Motor Corp.'s Lexus is the top-selling luxury line in the U.S., while Volkswagen AG's Audi leads the segment in China.

Daimler is pursuing Munich-based BMW to add sales in the world's two largest auto markets. The Stuttgart, Germany-based automaker will add manufacturing capacity in China to keep pace with deliveries, Zetsche said in a separate Bloomberg News interview in New York.

"We are in reach of BMW and obviously we are moving closer to Audi," said Zetsche, 56. "We will add capacity as needed to support growth demands."

U.S. sales of Mercedes autos through October totaled 153,713, trailing the BMW brand's 160,666, according to industry researcher Autodata Corp. of Woodcliff Lake, New Jersey. Daimler reported selling 50,700 Mercedes vehicles in China through October, while BMW posted sales of 71,952.

"The current and future relevance of the market can hardly be overstated," Zetsche said of China in a Webcast today.

Slumping demand in Europe and in the U.S., where sales fell in February to the slowest annualized rate in 27 years, has accelerated a shift in automakers' focus to emerging markets, he said yesterday.

'Emotion' for Chrysler

The Daimler chief said that "I still have a lot of emotion" for Chrysler Group LLC, which he headed when it was part of DaimlerChrysler AG.

The German company under Zetsche sold Chrysler to Cerberus Capital Management LP in August 2007 and gave up its remaining 19.9 percent stake in the U.S. automaker on April 27 of this year, three days before Chrysler filed for bankruptcy. The U.S. company exited court protection on June 10, controlled by Fiat SpA under a government-aided reorganization.

Zetsche said Chrysler should avoid focusing too much on small cars at the expense of sport-utility vehicles and pickup trucks, which along with minivans account for a majority of the Auburn Hills, Michigan-based automaker's sales.

Daimler is studying whether to shift some production of the Mercedes C-Class entry-level sedan to its Tuscaloosa, Alabama, plant, Zetsche said in the Webcast. The C-Class is the company's best-selling model in the U.S.

He said building some of the cars in the U.S. might protect against the rise in the value of the euro against the dollar, which pushes up the cost of Europe-produced vehicles in U.S. currency.

In the television interview, Zetsche said he thinks General Motors Co.'s Opel has a better chance for survival as a unit of the U.S. automaker than it would have under Canadian car-parts maker Magna International Inc.

The Detroit-based company said on Nov. 3 that its board decided to keep the German unit rather than sell a majority stake to Magna and Russian partner OAO Sberbank.