Reasons behind MB's downfall

[EnI]

The only worry I have is some of the things Mercedes learned from EADS might be too expensive for car manufacturing.

Yep, the cost-effective CFRP production is a bitch. But BMW have managed that problem quite well. Do not forget both MB & BMW got quite some CFRP know-how & rapid prototyping from F1 experience. While BMW went even a bit further: entering the state of art sailing racing with BMW Oracle Team. Some great know-how was gathered there, and the love (and strategic partnership) with SGL started at that time. Therefore BMW i cars will be revolutionary - being first volume production cars extensively using CFRP, also for body frame etc. And the CFRP cost is still high but bearable. Much more than any other car maker can achieve in this decade. So, BMW will have 5-7 years advantage & almost a monopole in CFRP mass produced cars. Quite some boost for the brand image as well, so marketing benefits are also huge here. No to mention BMW i cars will actually be a production version of "lab-on-wheels" cars - having the role "(active)E" cars have at the moment. Also sales channels for BMW i cars will be quite revolutionary. With virtual showrooms etc.

Yet what BMW needs are plug-in hybrid systems for low-end models, especially the upcoming FWD ones. Which will probably get from PSA & Toyota cooperations. And they'll certainly get some fuel-cell know-how from GM when needed. Mind the rising fuel prices will definitely boost hybrid development in the car industry. Not to mention the strict EU emission regulations - which are also the reason for more & more plug-in hybrids and EVs to come in the markets till the end of the decade. The deadlines are ruthless. And so is the race. And for a (relatively) small independent car company BMW AG has been doing extremely well in these turbulent times for automotive industry. Which is quite surprising & worth of admiration.

Eni,

At that time, Ford always knew a deal with BMW was a long shot because the Quandts were never willing to sell or give up control to the Ford family. The Quandts stood by BMW even in the worst days.

Sure. But it was a tactical move to put some pressure on BMW management & shareholder. It paid off ... Ford got LandRover. For bizarrely high price, IMHO. Which in hindsight has proved to be a failure for Ford. Eg. BMW did much better with the money they got from Ford for LR. So, Ford didn't acquire BMW ... but it still can be seen as BMW's savior. I bet the Quandts still have got a grin on their faces ... knowing what Ford's bad decision has done for BMW. Still it was all sour grapes due to complete Rover fiasco that had brought BMW into difficult position in the first place - and that was nothing but BMW's own fault, of management & of shareholders via Supervisory Board.

 

[K-A]

Please tell me you're not using "Magazine Tests" to judge an M-B's worth. These selfish "everything needs to feel like a Sports Car connected to the road" "Journalists" have never understood M-B. As far as I'm concerned, I hope M-B never win tests.... because then they won't feel like M-B's, they'll feel inferior to those of us who want the "M-B feel". M-B's have always got hammered in tests. The W126 lost to statistical champions, yet guess what? There isn't a Sedan from the 80's that anyone in their right mind would rather own today.

On the subject of cachet, I also feel that M-B is still the easy leader. It can sell cars for much higher prices than BMW or Audi's can, though BMW is creeping up in this regard as well. However, a $200K Mercedes can and will get snatched up as soon as it hits dealer lots.

In the U.S, M-B is still the cachet leader, and its presence in Pop Culture is stronger than ever. Celebrities, Movie's, Rap Songs, Pop Songs, etc. etc., when they need a metaphor to describe wealth or success, they still use Mercedes. BMW barely, Audi rarely if ever (though the R8 has on its own standing started to change that).

I just got back from visiting several European Countries, where I have lots of family and friends who reside. I asked so many people in my own quest for car-fanatical knowledge, which car had a "higher cachet" between Mercedes and BMW, and I was mostly interested because of M-B's strong presence in some Countries as a Taxi. Not one person I spoke to said BMW, though most said it's very close, and BMW's presence in this area is obviously growing as well. What I gained from Europe as an M-B enthusiast is an incredible respect for the brand and its history and forefathers who got them to where they're at today. People CHOOSE to buy them as Taxi's because they're the best for the job, yet the brand maintains top tier cachet? Incredible, if you ask me.

As for quality, M-B is already leading in quality again. In fact, both BMW and Audi's quality are dropping down significantly, according to anecdotal evidence via owner Forums, and of course, official research tests. M-B is near the top of all car manufacturers in quality and ahead of all Luxury Cars except for Lexus and Porsche (in a very close call), and once they phase out all "Schremmp era" cars, they'll probably be right at the tip top.

 

[Nicks]

The A and B Class are prime examples.

How can those be a prime example since they've been showing pretty good sales numbers in europe?

 

[K-A]

Unfortunately, that's true. My Brother who'd never seen or known about their existences, almost left Europe feeling M-B isn't as prestigious as he thought, since in the States, a car-layman like him see's M-B as the utmost of prestige. When I showed him the A and B-Classes, especially the first gen A-Class which might just be the ugliest car ever created in the history of the world, he couldn't believe that it was a "Mercedes".

From what I've gathered, at least from my friends and family, the A/B Classes aren't considered "Real Mercedes-Benz'es" in Europe.

 

[Wunderkind]

Eni,

Ford bought Land Rover after they brought in Wolfgang Reitzle to become the head of its PAG (Premier Auto Group). Reitzle wanted his baby - the Land Rover- back. I think deep down, the Ford senior management and Reitzle knew there was no chance of buying BMW.

Reitzle left Ford after realizing he was never going to be given the resources he needed to turn Jaguar, Aston Martin, and LR into the top luxury products he had envisaged. Reitzle said many not very nice things about his predecessor Nick Scheele, nothing personal, just that he knew nothing about making luxury cars. Btw, Scheele was a bean counter, and yes, he knew nothing about designing and engineering cars.

I think it would still be fascinating to speak to Dr. Reitzle privately about cars. A man of such fine taste and technical knowledge.

I also have the utmost respect for Dr. Dieter Zetsche. He was given many difficult tasks throughout his career at Daimler and he always delivered. He was sent to run Chrysler because Schrempp wanted to get rid of him. Zetsche was the only internal candidate capable of unseating him. Jurgen Hubbert was too old by then. Let's hope the new models will bring Mercedes back to the top of the league.

 

[Wunderkind]

How can those be a prime example since they've been showing pretty good sales numbers in europe?

The A and B Class are expensive to manufacture and the combined volumes have not been where they are for Mercedes to make money.

 

[EnI]

Eni,
Ford bought Land Rover after they brought in Wolfgang Reitzle to become the head of its PAG (Premier Auto Group). Reitzle wanted his baby - the Land Rover- back. I think deep down, the Ford senior management and Reitzle knew there was no chance of buying BMW.

Not that Ford hasn't been sniffing around BMW before. Just in case. BMW AG was very vulnerable at that time. But yes, I'm also sure Reitzle was a key factor for a deal between ford & BMW regarding LandRover. But it was more a move from which BMW benefited a lot. LR was sold to Ford for amazing 3 billion euros (in 2 billion now + 1 billion later payments)! So, 1.85 billion GBP, more than a billion pounds more BMW payed for the whole Rover (incl. LR, MG, MINI etc) in 1994. And nobody else offered nowhere near that sum for LR. It was a very expensive buy from Ford. I'm sure shareholders weren't very happy.

Also I'm not sure Ford was also in condition to buy a whole BMW AG, even if being on sale. Even VAG, which was also sniffing around BMW, wasn't able to acquire a significant stake in BMW AG at that time. Mind that more than 50% BMW shares are still in free float. So, hypothetically, some day a hostile investor is able to acquire more than 50% of BMW AG if offering other investors ridiculously high price per share.

Regarding Daimler ... rumor has it Aabar Investments Abu Dhabi have decided to sell their 9% share in Daimler AG, and that Daimler management is getting ready for a possible hostile takeover. No info on who could acquire Daimler. The Chinese, LOL? Not sure how possible the takeover scenario is yet I guess the management is taking some precautions anyway ... just in case. Mind around 81% of all Daimler shares are in flee float!!! 90% when Aabar steps out. Now that's a every unstable & vulnerable shareholder structure. It's not even a structure, it's rather more a mess. It's weird nobody really takes advantage of this situation, and finally steps in Daimler as a true strategic shareholder with solid majority. But who can that be? Current market cap of Daimler AG is about 42 billion euros. Add a premium, and we are a bit over 50 billions. Who can afford such enormous bite? Who beside VAG? Really some Chinese automotive company?

 

[Wunderkind]

It would be much more difficult for VAG to go hostile against Daimler as the "creeping takeover" tactic is now illegal. There were noises that daimler was in play until the European authorities ruled such tactic illegal. The creeping takeover tactile was used by Porsche to accumulate shares in VAG. It would depend on who aabar sells its Daimler stake to. Aabar does not necessarily have to sell it's stake on the open market. It may decide to sell to another sovereign investment fund if such a willing buyer is found.

The entire Chinese car industry doesn't have the funds to buy Daimler even if it wanted to. The Chinese government will have to step in to finance any such bid. But there really is no reason for the Chinese to buy Daimler outright. It's better for the Chinese to invest in tomorrow's technologies.

 

[Nicks]

The A and B Class are expensive to manufacture and the combined volumes have not been where they are for Mercedes to make money.

And you know that from...?

 

[Gianclaudio]

So Mercedes is going down, and then, going to get buy by a chinese car company. Mmm, I see.

 

[K-A]

You know what, I wouldn't even mind if M-B was bought out in one of those "good kind of buyouts", where the parent company let's the upper luxury company do things their way, without stepping in any more than board members and executives of the very company itself's would have.

I wouldn't mind if SOLELY if they cut all the small, downmarket and overinflated models coming out from M-B, and let them go back to being a purely Luxury Brand, more focused on core models and keeping the cachet intact without A/B/etc. models and an SUV plethora. M-B will always be the company it was to me: Focused and lean, pure Luxury marquee, even if I have to be somewhat ignorant to how the newer inflation of models.

Then again, I say "wouldn't mind" in that particular tradeoff, as in I wouldn't abandon the marquee right away at least. Though, yes, I would rather M-B remain as they are, independent and relying only on themselves, hopefully not sharing ANY upper/core models platforms or anything with Renault/Nissan, etc. Again, even if I have to remain somewhat ignorant to the influx of bloat models that hamper what M-B was always about to me.

 

[Wunderkind]

And you know that from...?

How did you think Daimler's Joint Venture with Renault-Nissan came about? Mercedes needed a solution to its A, B, and Smart car dilemma. The A and B Class are very expensive to build compared to its rivals and it has never been perceived as anything other than a mini MPV. They never did much to enhance the brand.

Don't get me wrong, the A & B Class are great for crowded cities with narrow streets such as Rome, Milan, and Paris.

 

[Human]

This seems rather interesting!

FORBES -pdf
2012 Special report:
Luxury Automotive Outlook

Take a look at/read in pdf file:- Regional Reality & So what’s in a name?

https://www.germancarforum.com/threads/2012-special-report-luxury-automotive-outlook-forbes-pdf.44363/

 

[Nicks]

How did you think Daimler's Joint Venture with Renault-Nissan came about? Mercedes needed a solution to its A, B, and Smart car dilemma. The A and B Class are very expensive to build compared to its rivals and it has never been perceived as anything other than a mini MPV. They never did much to enhance the brand.

Don't get me wrong, the A & B Class are great for crowded cities with narrow streets such as Rome, Milan, and Paris.

BMW have joint venture with Peugeot-Citroen and Hyundai. Does it mean, 1-series is very expensive to build compared to its rivals?

Your opinion on how they perceived has nothing to do with sales/profitability and that's what we're talking about here.

 

[Human]

Germany: Mercedes growth starts to slow

Tuesday, May 08, 2012,
Tags: Daimler AG, Germany, Sales Data, Sales and Distribution.
AutomotiveWorld.com
Mercedes-Benz reported global sales of 104,344 vehicles in April, a 3.6% rise year-on-year but down from the record 131,334 vehicles sold in the previous month of March. April’s 3.6% rise follows an...http://www.automotiveworld.com/news/oems-and-markets/93639-germany-mercedes-growth-starts-to-slow

 

[Wunderkind]

BMW have joint venture with Peugeot-Citroen and Hyundai. Does it mean, 1-series is very expensive to build compared to its rivals?

Your opinion on how they perceived has nothing to do with sales/profitability and that's what we're talking about here.

Daimler's tie up with Renault is very much based on the need to find a partner who has a suitable platform and running gear (drivetrain) to base future Compact and sub-compact models.

Daimler has not managed to recoup the investment spent on the A and B Class thus far. They might be making meager profit, but from a return on investment perspective......it's been a dud. In financial terms, they might be making Daimler operating profit, but the ROI is negative.

Btw, firms combine or enter into joint-ventures for many reasons. But they mostly concern sharing development costs and reducing manufacturing costs through larger scale of production.

 

[Human]

Equity Sales Trading
MORNING NOTE

30 April 2012

Daimler I
Daimler prepares measures to avoid or complicate possible hostile takeovers (including a
banking agreement to withdraw credit facilities of approx €8bn in case of takeover) article is
in “Automobilwoche” – GM may buy 10% stake in Isuzu Motors, start joint development of
commercial vehicles for Southeast Asia and Central and South America. (Nikkei newspaper)
(=) Daimler

May complain to Bafin, Germany’s financial regulator, about new rules on reporting financial
options that the company says have confused investors. Daimler had to notify investors this
month that, while Deutsche Bank had a direct stake of 3.6%, additional financial instruments
in theory gave the bank almost 18% of the voting rights. Bodo Uebber, Daimler’s CFO, said
the rules, which came into force in February, create “a high potential for confusion,” adding
that the company has “a balanced shareholder structure” and is “not a takeover target,” (FT)

(+) Daimler II
Daimler may overtake VW in 2015 luxury cars, Handelsblatt says-citing forecasts from the
Center of Automotive Research at the university of Duisburg-Essen. According to the CAR
forecasts, BMW will sell 1.76mn vehicles in 2015, followed by Mercedes with 1.68mmn and
Volkswagen’s Audi with 1.63mn.

SOURCE: http://www.baadermarkets.de/MediaLibrary/Document/MarketAnalysis/Morning Note 30 04 2012.pdf

 

[Wolfgang]

Nicks, Dieter Zetsche recently included the below figure about A/B-Class profitability in a talk,
suggesting it should improve quite a bit with the new generation compact cars (NGCC).

 

[mini_cooper4]

BMW have joint venture with Peugeot-Citroen and Hyundai. Does it mean, 1-series is very expensive to build compared to its rivals?

Your opinion on how they perceived has nothing to do with sales/profitability and that's what we're talking about here.

Read your comment and find what's wrong
You heard of Mini ?

 

[Nicks]

You heard of Mini ?

You heard of Smart?

Daimler's tie up with Renault is very much based on the need to find a partner who has a suitable platform and running gear (drivetrain) to base future Compact and sub-compact models..

This has nothing to do with modern A and B class at least for another generation - MB just introduced new front-wheel drive platform for a bunch of small cars which they made on their own

Daimler has not managed to recoup the investment spent on the A and B Class thus far. They might be making meager profit, but from a return on investment perspective......it's been a dud. In financial terms, they might be making Daimler operating profit, but the ROI is negative.
.

Proofs? Numbers? I see nothing from you