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The North American arms of two German luxury carmakers kick off major campaigns in the next month to sustain rising sales momentum.

BMW of North America breaks a TV branding push today, with commercials touting performance that retain the tag, "The ultimate driving machine." Fallon McElligott, Minneapolis, created the five 30-second b&w spots.

James McDowell, VP-marketing at BMW, said the automaker will spend about $30 million on the push through the first quarter of 1998. BMW plans to increase its annual ad budget of $80 million by about 10% in 1998.


"This campaign allows us to go back to the roots of this car, which is fun to drive," said Mark Goldstein, president of integrated marketing at Fallon. "This is what the soul of the brand is."

BMW insists that recent ads haven't strayed from its brand roots. "We've never strayed from 'The ultimate driving machine,'

" said BMW's Baba Shetty, manager of marketing communications.

The buy is heavy in cable, but includes spot in 14 major markets and network time during the U.S. Open on CBS. Print breaks in September issues of magazines.

BMW reported record seven-month U.S. sales-of 73,170 vehicles-last week. It reported the best sales year in its 25-year U.S. history in 1996, with 105,761 units.

Mercedes-Benz of North America expects to hit the 100,000 mark in the U.S. this year, a first for the brand. Mercedes last week also reported its best seven-month U.S. sales performance: 58,696 cars.

Mercedes is embarking on its most extensive new-vehicle rollout, preparing to introduce its first sport-utility vehicle, the M-Class, along with the all-new CLK 320 coupe and E320 wagon.

Mercedes is still promoting its 1998 SLK roadster, introduced earlier this year.


Mercedes expects to spend at least $55 million on marketing from mid-September through December on the new models.

The carmaker will appeal to nostalgia in mid-September, when it launches its largest retail initiative at its U.S. dealers.

The promotion is based on a strategy carmakers employed from the 1950s through '70s, when they kept tight wraps on new models until they were released at dealers.

Those "monstrously large launches," mainly by Detroit's Big 3, "created a buzz on the street," said Rich Anderman, general manager of marketing communications.: "I think we can capture that again."

The importer expects all 320 of its U.S. dealers to stage open houses and special events. Dealers can buy one of several packages from Mercedes for the so-called "Fall in Love" program, including planning guides, brochures, banners and other point-of-purchase materials, Mr. Anderman said.


Mercedes is providing dealers the names of potential buyers via its database, and that list will be augmented with names from a win-a-CLK sweepstakes.

Mr. Anderman declined to reveal specific "Fall in Love" spending. Lowe & Partners/SMS, New York, created new broadcast and print ads for the dealer program, which will run nationally.

They also can be used regionally or locally.

Mercedes' current national TV spot, with Marlene Dietrich's voice singing "Falling in Love Again," will be part of the fall ad mix.

Lowe worked with the Designory for dealership POP and with Diamond Promotion Group for event planning guidelines.

Philippe Defechereux, a former agency and auto company marketing executive, described Mercedes' retail effort as "an attempt to bring in new and different customers that have never shopped Mercedes before." But he cautioned that Mercedes' strategy to expand sales by entering segments in which it traditionally hasn't competed could dilute the exclusivity of the brand.

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