BMW cuts price to fend off Mercedes-Benz

BMW Australia spokesman Piers Scott admits the $64,600 price directly reflects the $65,600 tag Mercedes set on its C-Class C250 and says the company changed the price on February 24 -- a month after the initial values were released to the media but a day before the cars went on sale in dealerships.

Scott adds no customer paid the original list price of $66,900 -- avoiding the potential backlash from new 328i owners who saw the value of their car fall just days after sale.

The Mercedes ispowered by a turbocharged 1.8-litre engine and the BMW a 2.0-litre, with the BMW unit putting out 180kW/350Nm to the Benz's 150kW/310Nm. The Beemer also wins the fuel consumption battle with 6.3 litres/100km to 6.8 litres/100km for the Mercedes.

The price alignment follows BMW's decision to add up to $16,000 in equipment upgrades to its X5 range to counter the new ML-Class of large SUVs from Benz ahead of a new BMW model in 2014.

"They (the decisions) were very much a case of following Mercedes' lead," Scott admits. "We put performance ahead of pricing, but it is a competitive market and we will react as we need to to protect sales."

BMW was hammered in the small-car stakes last month. Its new 3 Series sold 342 vehicles against 630 of the C-Class. "We have seen a worldwide shortage of the 328i -- you cannot get one for love nor money," Scott says. "That's hurt us short-term but it also shows how popular that car is."

Mercedes spokesman Jerry Stamoulis says April was a huge month for the C-Class. "We outsold our closest competitors and had the second highest-selling medium car, regardless of price," he says. "The success should continue this month with the arrival of the Edition 30 to celebrate 30 years of the C-Class."

The Edition 30 will cost $3390 more than the standard C200 and C200 CDI models and adds the Comand system with satnav and a reversing camera, sunroof and 17-inch alloys. The C200 version will cost $61,990, with the limited edition turbodiesel C200 CDI set at $64,290.