Daimler has grand plans for small cars

[Wolfgang]

Daimler has grand plans for small cars

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[Mr. Mercedes]

Woflgang, do you mind cutting and posting that article? I don't want to register on that site.

Thanks mate.

 

[Wolfgang]

Woflgang, do you mind cutting and posting that article? I don't want to register on that site.

Thanks mate.

Here we go Mr. Mercedes.

Daimler has grand plans for small cars

By Daniel Schäfer in Frankfurt Published: June 13 2010 18:12 | Last updated: June 13 2010 18:12

Dieter Zetsche, Daimler’s chief executive, aims to push the carmaker to the top of the small premium car market, helped by a strategic partnership with Renault, the group’s French rival.

The German premium carmaker will launch an array of small car models to leapfrog BMW, its arch-rival, in profitability and revenues in this market, Mr Zetsche told the FT in an interview.

“We are market leaders with our S, E and C-class limousines. So it is obvious which market position we are due in the small premium car segment,” Mr Zetsche said.

The wide-ranging strategic partnership signed with Renault and Nissan, its Japanese partner, this year would help, he said.

“In the premium segments, which are more and more expanding into the small car segments, we want to at least achieve the market share that our brand deserves. Our future products and cost position will enable us to do that.”

Premium carmakers are pushing into the small car market as consumers’ preferences shift towards smaller but luxurious cars.

Daimler trails BMW in this area, where Audi has also intensified competition with the launch of its A1 small car. Daimler sold about 113,900 of its Smart-branded small cars last year, which compares with more than 216,000 Mini cars sold by BMW. While the Mini brand is clearly profitable, Smart has just about managed to break even.

Mr Zetsche said Daimler planned to launch a four-seater Smart based on Renault’s Twingo platform, as well as four versions of the new Mercedes A and B-class compact generation, which will hit markets from 2012 onwards.

The lacklustre design and high seat position of the current A and B-class vehicles has so far failed to lure many younger customers to the Mercedes brand.

Mr Zetsche defended the partnership with Renault against criticism by some analysts who have called it a makeshift solution.

“We have spoken to Fiat, we have spoken to VW and we have spoken to BMW which partly led to results. And we have been approached by the Japanese and GM and others. There has hardly been any carmaker that has not approached us. But we have come to the clear judgment that this [Renault] is definitely the best option,” he said.

Mr Zetsche vowed to expand Daimler’s position as the most profitable premium carmaker, which it achieved in the first quarter when its Mercedes Benz unit swung back from large losses in the past year to a 7 per cent operating profit margin.

“When it comes to revenues and profits, we are clearly leading BMW and Audi. This is the position that we want to maintain and expand,” said Mr Zetsche.

The carmaker recently revived its pre-crisis target of an operating profit margin of 10 per cent at its Mercedes unit, a goal it now aims to achieve by the second half of 2012.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

 

[Mr. Mercedes]

Thanks Wolfgang!

It's nice to read about profitability. For so long articles have been silent on the issue.

Smart has a lot of work cut out for them. The Mini brand has been marketed brilliantly and Audi's small cars will carry the Audi name itself.

I don't think the article is correct in stating the A & B variants will use a Renault platform. Engineering on these is already well underway and it will be a Mercedes platform this time around.

 

[SKY]

Is Mercedes really market leader in the S, E, and C Class segments?.

 

[Nicks]

Is Mercedes really market leader in the S, E, and C Class segments?.

not sure about c-class, always thought that 3-series is selling better

 

[Mr. Mercedes]

At the moment yes. The C, E and S are market leaders globally.

The current C has made monumental inroads against the 3-series and outsells the 3 by some margin in quite a few markets. It simply offers everything people love about a Benz in a much more youthful package than ever before. As simple as it seems, the avantgarde grill was a stroke of marketing genius.

The E is undoubtedly benefiting from the changeover of the 5, but is selling very well even putting this aside. I think people are really responding to the 'return' to core values so evident in the C and E.

And the S...well, it simply is the sales benchmark of its segment. Despite Audi's and BMW's outstanding efforts (both of which may now actually be better cars technically), when it comes to this level of money, a Mercedes S still reigns supreme. There's an intangible aura and image that the S conveys best.

That said, BMW is readying a new 3 as quickly as they possibly can, cutting the current cars lifecycle a bit short. The replacement will undoubtedly be brilliant and the class benchmark, unless Mercedes manages a miracle face lift on the C. And I think the 5 is as good as it needs to be to resume market leadership when it hits its stride. So it's likely gonna be a few short lived glory months for Mercedes.

 

[SKY]

So what makes BMW market leader? small cars?.

 

[SCOTT27]

That said, BMW is readying a new 3 as quickly as they possibly can, cutting the current cars lifecycle a bit short. The replacement will undoubtedly be brilliant and the class benchmark, unless Mercedes manages a miracle face lift on the C. And I think the 5 is as good as it needs to be to resume market leadership when it hits its stride. So it's likely gonna be a few short lived glory months for Mercedes.

BMW are not cutting the life cycle of the 3er . The new 3er will be revealed before the close of 2011, prior to a launch at Geneva the following March. 7 years since the launch of the E90.

The biggest areas for growth in the next decade are in City Cars , the Compact segment and the small executive/Sport sedan segment.

 

[Mr. Mercedes]

BMW are not cutting the life cycle of the 3er . The new 3er will be revealed before the close of 2011, prior to a launch at Geneva the following March. 7 years since the launch of the E90.

The biggest areas for growth in the next decade are in City Cars , the Compact segment and the small executive/Sport sedan segment.

Thanks for clarifying Scott. I was following information in 'Car' which is usually pretty accurate.