Mercedes Benz to defeat Lexus by 2008

[Psionic Wibbly]

New CEO Dieter Zetsche aims to beat Lexus in quality, make the Smart division profitable, and lift Chrysler's productivity -- and all by 2008

http://www.businessweek.com/autos/co...n_id=rss_daily

Pretty amibitious targets for a luxury brand known for abyssmal quality and a mainstream division that has just hit the panic button (AKA emplyees prices for everyone + free financing for 6 years + 30 day money back guarantee)

[mgescuro]

That will be an interesting stance to take for DCX and Mercedes. I do agree with his take on Mercedes not "competiting" with BMW and Audi on the sporty aspect of the cars. Mercedes has never really been about the sport, but about the "experience" of being in a Mercedes. Sport shouldn't be the core focus, but it shouldn't be tossed aside.

To me... it looks like Mercedes is drawing the line in the sand. They aren't content to let Lexus' challenge go unnoticed. THey saw what happened to Cadillac and Lincoln in the 90's. THey were decimated. Mercedes won't give up the leadership without a fight.

And the battle for Cadillac just got that much tougher.

[kenman923]

I would call that a bold move.

[cfch3399]

Boy, this is a revolutionary statement. After decades of producing crappy cars they are FINALLY going to make quality an issue. MB has been so fortunate that they have a such a great reputation and image in spite of their unreliable products.
Of course, as usually happens with goals, most won't be achieved, DCX is not going to be #1 at everything, most likely not even #1 at any one of the areas targeted but at least they will try, or at least they say they will.

[SUPERBADD75]

to just recognize the fact that Lexus is the company (brand, company, whatever) to target is a great start. Lexus got where they are today not by making leaps and bounds, but by making everything just a little better each time they redesigned it. meanwhile Mercedes put a lot of focus on the luxury features and look of their cars and let quality go a bit. if they can make their cars as high in quality as they are in luxury, they'll surpass Lexus. their biggest problem, however, seems to be that the Chrysler (all American parts of the company; Chrysler, Dodge, Jeep) division isn't anywhere near being a competitive force in the marketplace, and for a mainstream volume brand that's not good. they need to focus on quality there as well, but also maybe try to find out the types of cars people want and build them. the Neon didn't cut it, the Stratus doesn't cut it, and they can't make a living on just minivans.

[megeebee]

Wow. A tacit admission of............well, inferiority. The world HAS changed. As for Mercedes, I can attest to this: The local Mercedes dealer has their service dept. located on my route to work. It's seperated by 3 or 4 miles from their showroom. It's a very good idea to have them seperated like that. The line of cars at the service doors is usually a long one, and it might put-off sales prospects to see that. I'm there every few weeks picking up a friend of mine who has relatively new E 320.

The last JD Powers initial quality ratings were very unkind to all German makes, Luxury or otherwise.

[mkaresh]

BMW would have fared very well in IQS if not for the inclusion of "design defects":

http://www.truedelta.com/pieces/IQS2006.php

But IQS isn't really the issue.

After taking the CR survey myself, it dawns on me that CR might actually make German cars appear more reliable than they are, because you can only report one electrical problem per year.

Recent piece on CR survey:

http://www.truedelta.com/pieces/cr_survey.php

Bottom line for Mercedes: don't say you're going to do it, just do it. Plenty of companies say they're going to do this and that, and a few just do.

[gmwsag]

Good luck.

Mercedes-Benz quality is sinking, along with BMW, according to the iffy-JD Power. I don't really like JD Power's reports, but they show quality is shaky. But, that's only because of their weird navigational systems. One thing that Benz has going for them is image. Something about the Benz moniker really stands for luxury across the world...something that BMW & Audi have yet to reach. The new CL and S-Class shows new design directions for Benz, and they both look good. I think that Benz can only beat Lexus if they come up with new C-Class' and E-Class' that can tackle Lexus. Really tackle Lexus.

As for the Smart division, I'm not so sure about whether America is ready for these small vehicles. I don't know anything about their reliability & safety, but I know that potholes up in the North are really big.

And for Chrysler, how can they acheive success if they continue to poor on big incentives, horrendous rebates, and stupid employee discounts. Didn't they learn anything from last year?

[mjd1001]

I don't think MB can easily, if it all, defeat lexus by 2008 in Quality if they are lagging behind right now.

It's a simliar situation to what GM is facing with Toyota. You have the best intentions, but a higher cost structure. If MB and GM and Lexus built the exact same car, Lexus could do it at the lowest cost. Therefore, what they save at that lower cost can be used to invest in anything they see fit..in this case, quality.

[roteague]

Originally Posted by megeebee

As for Mercedes, I can attest to this: The local Mercedes dealer has their service dept. located on my route to work. It's seperated by 3 or 4 miles from their showroom. It's a very good idea to have them seperated like that. The line of cars at the service doors is usually a long one, and it might put-off sales prospects to see that. I'm there every few weeks picking up a friend of mine who has relatively new E 320.

And for 5 years I worked right next to a Toyota repair shop - its parking lot was always packed.

[b4z]

I just got back from 9 days in England and BMWs, Mercedes, and Audis are a dime a dozen over there.
very few of the big Lexuses and some of the smaller ones are around, but they almost looked out of place.
Their styling is really bland compared to the other cars available.
And I think Europeans want a more involved driving experience than what lexus offers.
The English are also much better drivers than Americans.

We hired a car to pick us up in London and take us to gatwick airport.
It was a Eclass 260 Turbo Diesel and that thing has some serious power.
And it averaged 34mpg in the city!!!!!!!!!!!!

[megeebee]

Originally Posted by gmwsag

Good luck.

.

As for the Smart division, I'm not so sure about whether America is ready for these small vehicles. I don't know anything about their reliability & safety, but I know that potholes up in the North are really big.

I'm skeptical, too. The Smart brand has lost billions for DCX in Europe, I don't know why bringing such product to the US will help. DCX has been, until recently, toying with the idea of giving up on Smart and closing it. Thanks to the price of oil, they've changed their minds. In fact, this is not the first time they announced Smart was coming to the US. It's been an on-again-off-again thing for a couple years now.

[jbartley]

oooo. This is a battle i'd like to watch. haha.

Dieter has ALOT on his plate. These next few years are going to be interesting.

[tgagneguam]

While I'd normally be skeptical of such claims, I do recall one Korean automaker that had a basically awful image in terms of quality and that only a few years later bested Toyota in some quality studies. If Hyundai can do it, why not a luxury automaker like Mercedes? After all, and prior to the launch of the now vaunted Lexus division, MB did quite well for itself in quality studies. We can all list the reasons why MB cannot do it, but Hyundai nicely proves that anything's possible... as much as I dislike praising Hyundai, and as much as I'd like Cadillac to sit atop the vehicle quality heap.

[jbartley]

Originally Posted by megeebee

I'm skeptical, too. The Smart brand has lost billions for DCX in Europe, I don't know why bringing such product to the US will help. DCX has been, until recently, toying with the idea of giving up on Smart and closing it. Thanks to the price of oil, they've changed their minds. In fact, this is not the first time they announced Smart was coming to the US. It's been an on-again-off-again thing for a couple years now.

I don't care how "safe" they say the smart cars are. Americans already don't trust an Echo vs Dodge Ram, so why would they want to risk getting FLATTENED in a golf cart?


And it's ugly.