Mercedes-Benz loses ground to BMW, Audi

FRANKFURT: Daimler AG's Mercedes-Benz is falling further behind in the luxury car contest. Burdened by a disjointed strategy in China, sluggish expansion of entry-level models and an aging S-Class sedan, the once-dominant upscale nameplate has slipped deeper into third place. The Mercedes sales gap to Volkswagen AG's Audi has more than doubled within a year.

"Mercedes's problems are home-made problems," said Christian Ludwig, an analyst with Bankhaus Lampe in Dusseldorf. "It's going to be extremely difficult for Mercedes to reach the No. 1 spot. The others are not sleeping."

Stuttgart, Germany-based Mercedes delivered 964,900 cars and sport-utility vehicles worldwide through the first nine months of 2012. The 5% gain failed to keep pace with rivals, meaning it lagged Audi by 132,600 vehicles, up from 53,900 a year ago. The gap to BMW widened 41% to 145,000 vehicles, according to data from the carmakers.

In September 2011, Daimler CEO Dieter Zetsche sought to cap the celebrations for the automaker's 125th anniversary by setting the goal for Mercedes to become the best-selling and most profitable luxury- car brand by 2020. At the time, he said it was "impossible" for the brand to accept being third.