Mercedes turns to S-class gadgets to attract younger buyers

As KHABAR KHODRO reports , BERLIN -- Daimler AG's Mercedes-Benz, overtaken by Volkswagen AG's Audi in luxury-car sales this year, is pepping up its lineup of small cars with cameras, radars and Web access to give younger buyers the feel of the S-class flagship.

The automaker is building an 800 million-euro ($1.1 billion) factory in Hungary and investing 600 million euros to upgrade a plant in Germany to expand production of the models.

Daimler CEO Dieter Zetsche needs to widen the appeal of Mercedes smaller cars to regain market share from Audi and industry leader BMW AG. Mercedes is replacing the boxy A class with a sporty hatchback and is considering a small coupe and SUV.

"Mercedes's small cars haven't been much of a success up to now," said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. "There needs to be an improvement, because compact vehicles are becoming increasingly important for high-end carmakers."

The average Mercedes buyer in the U.S. is 54, four years older than BMW and six years older than Audi, according to San Diego-based market research firm Strategic Vision. By attracting younger buyers, carmakers aim to develop brand loyalty early .