Product flow does not end upon the delivery to customers, especially for cars. Normally a car can last for at least 10 years, but some owners would not hold their cars that long. Used cars will then enter the second-hand market, and the dealer function acts just like one of the new cars. With the rise of lease-purchase, more customers are switching cars every 2 to 3 years, and the amount of almost-new second-hand cars increases drastically. So, where would these newly used cars go?
The case of the US-spec Mercedes-Benz W205 C300 sedan in Taiwan provides a feasible and profitable solution to this. As of the 2019 model, the MSRP of the base model C300 in the US starts from just over $41,000, but the standard quoted price from Mercedes-Benz Taiwan is about $87,000. The price difference is already large enough for the parallel import market of new cars, and the unauthorized dealers specializing in US-spec new cars have been around for decades. Now, they are pushing the business to another magnitude.
Since the W205 generation, Mercedes has sold many C-Class as rental cars in the US. Both corporate and individual customers can technically own a new Mercedes with a fixed monthly payment and are eligible to end the contract after a few years. Considering that the first-hand buyers of luxury brands usually do not hold the car for too long, this is a win-win solution for the manufacturers and the customers.
After the contract, these rental cars will enter the secondary market. Seeing the quasi-new C-Class piling up at an even lower unit price, the businessmen in both places collaborate to form a further product flow of C300. These C300 are collected in the US, purchased by Taiwanese dealers, and then shipped to Taiwan. The inventories are so many in the US that customers in Taiwan can specify the color, trim, and options for the used C300.
As indicated by the outdated regulation in Taiwan, all cars first entering Taiwan are considered fully new, so these C300s are counted as new cars by the motor vehicle office. Since 2017, US-spec quasi-new C300 can be purchased in Taiwan at $49,000 on average, while MB-Taiwan offered a new C250 at over $80,000 before the facelift. The unit listed figure of C-Class has been constantly over 500 per month, and it is sometimes up to 800. Over half of the units are US-spec C300, exceeding some Lexus or VW models. Half-priced, more power, why not?
The key factor in the C300's prosperity is the price difference. Mercedes cars in the US are just so cheap compared to those in Taiwan. The local dealers will never replace the authorized MB-Taiwan, but once MB-Taiwan keeps the over-priced strategy, the parallel import market will stay.
Who exactly buys US-spec C300 in Taiwan? Undeniably, W205 C-Class has an attractive look, and young people are fond of it. The quoted price from the authorized agents would be too high for most young customers, however, and the price of a 2-year-old C300 is just a bit higher than a new Mazda 6 or VW Passat. Some thrift-rich people will also consider this when buying a car. This is why C300 is everywhere on the island, and MB-Taiwan is losing its sales.
The prevalence of C300 fosters a controversial subculture. Mercedes has been regarded as a highly prestigious marque in Taiwan, and C300 is like a shortcut to the dream. Wealthy businessmen often buy Mercedes to show their status, but some not-so-rich young people are tightening their belts for a C300 now. Some C300 owners overly boast about their ownership of a Mercedes, and more people tend not to regard C300 as a proper token of status nowadays.
