Why Mercedes is ruining BMW's 100th birthday

BMW M2BMW GroupThe new BMW M2

It’s BMW’s birthday, but another German car maker is spoiling the party.

Next week BMW will celebrate its 100th anniversary — just in time for the Geneva Motor Show — but across the showroom floor, Mercedes-Benz is looking to capture the title of top luxury car brand which BMW has held for a decade, Bloomberg is reporting.

In fact, Mercedes will have the better offering at Geneva, according to Bloomberg’s Elisabeth Behrmann wrote:

[Mercedes’ progress] highlights the challenge facing BMW to re-energize the brand. Yet the Munich-based company isn’t bringing any new models to this week’s Geneva International Motor Show, in contrast with Daimler AG, which will show its bread-and-butter Mercedes E-Class sedan to European audiences for the first time, alongside a C-Class convertible.

The news of Mercedes’ resurgence is a surprise to critics who had, just a few years ago, declared that the three-pointed star had lost some of its lustre.

Since then, CEO of Mercedes-Benz’s parent company Daimler AG Dieter Zetsche has lead a sales charge in China, while BMW’s sales have struggled there.

But the biggest reason for BMW’s stalled grown may be that it simply has run out of room:

Part of the reason BMW lacks near-term growth drivers is that it’s already occupying just about every segment it can, even pushing into people carriers with the van-like Gran Tourer. That creates a difficult challenge for Krueger, who at 50 years old is the youngest CEO of a major automaker, as he tries to shift the company from its roots emphasising acceleration and handling to tackle the transformation of the car into a smartphone on wheels.

While technical challenges are an industry constant, what BMW has depended on for that top spot are new markets — which for the time being seem to be exhausted.

And the biggest new bet that BMW has made lately — the electric and electric-hybrid “i” series — is threatened by falling oil prices.

NOW WATCH: Take a tour of the $367 million jet that will soon be called Air Force One

NOW WATCH: Executive Life videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.