German Car Forum

That is true - the 300c, in particular, could end up being one of the best-selling American cars outside the US in decades.

Also Merc1 - I hope you're correct about DCX being able to turn things around at Mercedes in 1-2 years - but the analysts don't seem to be quite so optimistic.

Merc1 , but we all should consider, why Chrysler is now, as you state, maybe in a better situation than MB. It's still the fact, that the brand MB got less management attention after the merger and run therefore in big problems ( don't forget also the Mitsubitchy desaster, which caused also management problems).
The company is with it's current structure still a too fat giant. I'm still convinced that without Chrysler the MB brand ( we should say the former DaimlerBenz Holding )
would be in a better situation. It's simply not possible to have better operating profit with this clumsy construction.

And BTW , a little OT, but: to release 8500 workers with compensation payments - no one is fired, as some are here declaring - is mainly caused by increasing productivity.
Currently every next model cycle could be produced with 5% less work force. That's the normal evolutiuon in the industry.

I would not be supprised if BMW will announce the same strategy next year!

Interesting theory, but the reality of it is that Mercedes was headed down the wrong read in 1998 before the ink was dry on the agreement to buy Chrysler. Mercedes under Shremp was putting out too many models at once and that combined with running Chrysler ran Mercedes down, not just the merger. The M-Class was presented in 1997 and it was a cheapo product long before Chrysler had anything to do with Mercedes.

Mercedes problem is that they've strayed from the traditional market segments too much and way too fast.

M

Exactly, the problems at DaimlerChrysler are structural and permeate throughout the entire organization. From the way they design cars, the production of them, and the overall strategy. Being 10 years behind BMW and Toyota in terms of factory design and productivity is a HUUUUGE deal.

As for strategy MB needs Chryslers cash now, but whether any truly beneficial synergy can be achieved amongst the two brands in future, I seriously doubt. Chrysler is always going to be a dead weight on Mercedes returns, because they're not a premium brand and can't charge premium prices. And then they expect using premium MB components will help reduce costs? As Martinbo said, the brands are just simply too disparate to share platforms etc. Where exactly they were planning to develop economies of scale from this takeover, I'm not sure. Schremp just had a wet dream of becoming one of the largest in the world, couldn’t possibly do it only through the extension of the MB brand, so went after Chrysler.

I'd like to see MB part ways with Chrysler in the mid term but retain smart. Smart is the brand that should be used to proliferate in the smaller markets. Without it, they can't compete with BMW's mini and the multitude of other makers in this market, and there is no way the MB brand can go any lower than the A. In fact drop the A, keep the B, and develop a proper rival for the 1 and A3.

Also this AMG situation has been bugging me for quite some time. They have just gone overboard with the expansion of the lineup, and some of their cars are completely unnecessary. Who wants an AMG B, and is an AMG R or M essential at this time. Save the pennies and use it elsewhere. Sure they probably only develop these models if they can achieve adequate returns, but the money could better be used elsewhere.

Still though, I think Zetsche is the man for the job. And perhaps its a blessing also that Bernard is now in charge of VW. With these two at the helm of these hemorrhaging companies I have a feeling that we will see much more cooperation between Chrysler and VW, leaving VW to play around with its Audi brand, and Daimler Chrysler with MB.

Very true Merc1, the M-class was developed way ahead of the merger. Most of the work on the S was also done much before, so the quality of these two models can't be put to the Merger entirely. But the fact is Chrysler was a HUGE drain on Mercedes engineering and managment, and they would have started mending MB much earlier if Chrysler weren't in such a critical state. Instead they let MB trade on its reputation for a bit too long, and now the tables have turned completely.

I happen to be a Chrylser dealer, so I think I would have a better understanding of how the company is doing. The only reason Chrysler sells cars is by putting rediculous incentives on them (employee priceing plus). Just because they may sell a lot of cars doesnt mean the company is making any money. BTW 300's were selling well when they first came out, but so was the PT cruiser and now someone can Buy a brand new one for 13k. 300's have also slowed down. Chrysler also puts incentives on the dealer. If the dealer makes a certain quota by the end of the month Chysler awards them some money. This means that towards the end of the month cars are selling at 5k below invoice.

Thanks for that interesting and insightful information Matt - it's like I often say, "things are seldom what they seem".

Not that I don't believe you, but that is very interesting considering all the other things you've stated before that were incorrect. Are you a salesman?

Every product goes through and up and down cycle Matt. If you're a dealer you know this already. The 300 is no different, but not even you can deny that the 300 saved Chrysler. As far as them making money I doubt you'd be any more privy to Chrysler's internal financials than anyone else, even at the dealer level. All we can go by is what they issue in press releases and going by that Chrysler is making the money for DCX at this time. Now if you have some that says otherwise I'm surely interested in reading it.

M

What have I said that is incorrect? Please inform. It really doesnt sound like you believe me.

I'll tell you what. I can find out Chrysler's financial situation by tomorro but things from my perspective look pretty grim. Financially, there not smart. They spend tons of money building cars that will never enter into production and not enough money on cars already in production. They allocate too few cars when demand is high and way too many when demand is low. Their advertising stinks and they don't know how to market their vehicles. The company isn't doing well as far as I can tell. Most of their vehicles don't sell well even when they first debut (excuse the 300).

In our previous conversations about what is based on what. You know like the Pacifica/R-Class etc. Nothing pertaining to the above information about sales/incentives etc.

M

Yes, well if you look back on that post you will see that I wasnt positive (which I stated), so I looked it up. I am not on the Mercedes side of things so I dont know what parts and products they borrow from Chrysler.

Well that was kinda my whole point, that they don't borrow anything from Chrysler its the other way around, but its all good no biggie.

M