Why don't bikes by auto manufacturers make it into bike shops or onto the streets? Currently I am considering getting a 'Mini' brand folding bike mail order, even though I have not seen one in a shop or in the street. This I am happy to do as it is a re-badged Dahon at a special price.

Being a niche product I can understand why bike racks are not filled up with 'Mini' folders, however, I don't know why it is that all other bikes by auto manufacturers seem to completely fail in the marketplace.

Peugeot did really well until mountain bikes came along so it is possible for an auto manufacturer to succeed at bikes. Other than the past efforts of Peugeot the only real-world evidence in the UK of the efforts of the auto manufacturers are a few bicycle-shaped-objects from mail order catalogues with tacky 'Land Rover' decals on them.

I would not mind a Mercedes road bike and a BMW mountain bike just so I could have running jokes, e.g. casually mentioning that 'I came in to the office with the beamer today', 'I parked my Mercedes in the car-park', etc. For joke-reasons alone I would have thought bikes-by-auto-companies would have enough kudos to sell. But they don't. Why is that? Do they sell well outside the UK?

In case you have not seen any bikes-by-auto-manufacturers, here is a small selection of them.
The simple answer is market forces. Most bikes done by auto makers are built as an add on to a vehicles' sport package. 

They are not manufactured or offered to bike shops at all. This tactic can be quite effective. Look at the VW Jetta Trek, or the Ford/Kona partnership. 

The problem is that they are generally very basic bikes, offered at a much higher price than the value of the bike. 

In the Ford/Kona case, it was a 500 US dollar bike offered as a 3000 dollar add on with the car. 
No reputable shop will do that. 

The Jetta Trek was a very similar package, but it was a $5000 add on and included a Thule rack for the car. 

Mercedes' offerings are a piss poor design, offered again at a ridiculously high price, although they at least have the excuse of a unique in house design and low production numbers to blame the price on, since they didn't just rebrand a cheap bike shop bike.