K/A,
What would be the reason for Audi then? Look at the A4 and the A6, they have never sold at the heights they did back in the early 2000s, only the A8 does that now. Yet Audi breaks sales records every month, it is because of totally new models they've added since, like the Q7, Q5 since then. Again, look it up:
http://www.goodcarbadcar.net/p/sales-stats.html
What is holding the A4 and A6 back from selling at their previous rates? Design, market competition, what is it?
M
Ok, so we're talking about product dilution to help a brand. With Audi their lineup is small enough to where they don't have higher end cars in danger of that "harming", therefore they were ready and poised to build on their lineup. M-B was known for being a brand consisting of only high end cars, therefore the new models that are carrying the weight of their sales portfolio can be culprits as to why higher end M-B's aren't selling as strongly anymore, if that is indeed the case?
If the CLC comes out and starts helping further dilution to pull sales away from the CLS, M-B brand sales can go up, but their higher end lineup will continue to fall, therefore changing M-B's positioning as a high-end-brand to a more economical-premium-centric brand.
Not saying it's good or bad, but it's what's happening.
Not all high end cars are selling less than they used to. Porsche is selling in record numbers, for example. If you think about it, those who's portfolios are being heavily expanded with cheaper newer cars are seeing it the most.