Mercedes-Benz plunge puts crown at risk

Sales at Mercedes-Benz, the highest-volume U.S. luxury brand for the past two years, plunged in July after inventory shortfalls and a technical glitch handicapped dealers.

Mercedes-Benz deliveries tumbled 23 percent last month to 20,034 — the steepest drop and lowest monthly total so far this year for the Daimler AG brand — shrinking its lead over BMW AG to 3,514 vehicles. The German automaker said a “temporary dealer inventory shortfall” related to a changeover in 2019 models, and an unrelated “mainframe outage” gummed up dealer operations in the busiest week of the month. Resolution of the technical glitch is “nearing completion,” the company said in a statement.

“We are working closely with our customers and dealers to help alleviate any inconvenience resulting from the model year 2019 delays,” Dietmar Exler, the head of Mercedes’ U.S. operations, said in the statement. “While we expect to replenish our inventory levels in the fall, these developments will likely have a negative impact on sales in the coming months.”

Not that BMW was able to fully capitalize on its rival’s headaches — the German automaker increased sales by only 17 vehicles as a rally in X3 and X4 compact crossovers was wiped out by declines of 10 percent or more for the X5 and most of its luxury sedans, such as the 5 Series.

Toyota Motor Corp.’s Lexus brand also posted its steepest drop of 2018. Sales tumbled 12 percent, the fifth straight month of declines, with gains for the RX and GX SUVs overwhelmed by a 28 percent collapse in sedans. Still, Lexus was the top-selling brand in July, as it was a year earlier.

Volkswagen AG’s Audi brand, the smallest of the top four luxury players, managed the biggest gain last month. Sales increased 2.1 percent in July to 19,221, propelled by the A5 sedan and the Q5 crossover.

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