Mercedes Expects Sales to Increase by 5% by the End 2012 image

Mercedes-Benz expects car sales to increase 5% by the end of this year and to double by the end of 2020.

So far almost 90,000 Mercedes’ new A class models have been ordered, according to the weekly Die Zeit. The chief executive of Germany’s Daimler AG, Dieter Zetsche, confirmed the automaker plans to increase sales of the Smart and Mercedes brands by 2020 to2.6 million vehicles.

“The approximate magnitude is correct,” he is quoted as saying.

He also said that the company plans to cut costs by 2 billion euro ($2.55 billion) by over the next two years, and manufacture more cars with the existing workers, avoiding cutting jobs. According to the Detroit News, many investors believe Mercedes’ long-term sales and profit targets are impossible to meet and also contradictory.

Last year, the brand sold 1.26 million cars, 120,000 fewer than rival BMW and over the last 10 years, its sales rose only 1.4%, while BMW’s rose 6% and Audi’s 7.4%. One reason for this is the fact that Mercedes’ traditional markets are under threat because of government rules advocating lower fuel consumption. Also, Daimler has an unnerving habit for investors of suddenly withdrawing its estimate of profits and replacing it with a much worse one without warning.