There is an identity crisis at Mercedes Benz and its root
causes can be traced back to the three Japanese car makers, namely Honda,
Toyota and Nissan. It is a phenomenon
called “Dual Car Company Concept” and it is the result of the natural evolution
of their global marketing strategies.
After WWII, Japanese car manufacturers listed above had to
start small in rebuilding their manufacturing capacities. Their primary
offerings were small affordable economy cars intended for a global consumer
base including the United States. Affordability and reliability were the key
marketing strategies and these strategies worked well for the Japanese.
However, in order to further expand, Japanese had to challenge other global car
manufacturers by expanding into the luxury car segment. Hence Honda, Toyota and
Nissan established Acura, Lexus and Infinity respectively, their dual car
companies, hence the Dual Car Company Concept, whose specific task was to make
their original car companies to be a global force to be reckoned with, offering
a range of products from econo-boxes to high end luxury cruisers.
Daimler Benz on the other hand did not need a duality
partner since it was originally intended to be a luxury car manufacturer. After
all it had the Maybach division whose task was to compete with Rolls Royce and
more recently with Bentley. In addition, some years ago, Daimler Banz
management also made a decision to offer smaller cars in direct competition
with BMW. It seemed Car Gods were happy with the status quo and sales were
pleasing for everyone involved. That should have been the end of the story but
it wasn’t.
For a very long time, there have been, in general, two kinds
of car companies. By and large, there were giants making production cars (VW,
BMW, Mercedes, GM, Ford, Chrysler, Fiat, etc. etc.) for the low and high end of
the market. In addition, there were smaller specialty car manufacturers
(Ferrari, Maserati, Lamborghini, Aston Martin, etc. etc.) for the select few
and that was a problem for the giants since such limited production cars ruled
the news and the glory of car manufacturing simply because they were dream cars
of their days. There was a period when big boys with big check books acquired
these smeller boutique car manufacturers to share in the lime light. Ford
bought Aston Martin, Fiat bought Ferrari, Maserati and Alfa Romeo while Lamborghini
went to VW/Audi/Porsche Group. Mercedes ended up with nothing.
Suddenly, senior management at Daimler Benz realized what
has just happened and a frantic search for a specialty division to build
prestige cars began. Enter AMG Division… Yet, the decision had unforeseen
complications… From the very beginning, Mercedes had a very competitive edge, a
racing heritage in its DNA. There were countless victories on tracks, rallies
and road races. These victories have improved the breed and resulted in
legendary road cars like 540K Special Roadster of the 30s and 300SL Gullwing
Coupe of the 50s among others. Mercedes on those days promoted itself as the
sports sedan of the automotive world. They were offering 4 valves per cylinder,
dual overhead cam shafts, four on the floor transmissions and bucket seats not
to mention superchargers and turbochargers. AMG Division was simply a
redundancy of sorts in terms of sportiness. After all the SL class was supposed
to do what AMG was intended and expected to do in the first place. So began an
effort to look for ways to discriminate between AMG and Mercedes brands.
Suddenly, shifters moved from center console to steering column (just like the
3 speed shifters on the steering column of the cars of the 50s) and V12s
disappeared from Mercedes brand. Suddenly some engines were being manufactured
with 3 valves per cylinder. A sudden urge to develop higher levels of
computerized driving took hold. In the process, Mercedes lost its identity to
AMG. But the disaster didn’t stop there. AMG brand started flaunting 3 pointed
stars on its front grille and wanted to leave behind its specialty car
manufacturer identity and grow into a division with large production numbers. They
are advertising their engines as being hand built while in the process inadvertently
implying all other Mercedes Benz engines as being production line junk. Currently,
there is an AMG copy of almost every car Mercedes Benz offers albeit at a
ridiculously inflated prices thanks to an ill-conceived marketing strategy. AMG
and Mercedes are now competing for the same consumer segment and are at each
other’s throat for the same market share. A sale for one is a sale lost for the
other. In the process, Daimler AG has become a car manufacturer at war with
itself.
Currently Mercedes Benz doesn’t offer a single car with the
gear selector on the center console. Not one Mercedes Benz car offers shift
paddles behind the steering wheel or a V12. If you want those, you must get an
AMG, not a Mercedes. An image that took 100 years to build is suddenly out the
window.
There was so much Daimler AG management could have done to
fix these image problems yet somehow they totally seem to be brain dead.
Instead of bringing AMG name plate to Mercedes brand, they could have developed
AMG into a boutique car manufacturer like Ferrari, Maserati or Lamborghini. All
they had to do was to remove 3 pointed star from AMG brand in order to
establish its own identity and get a now inactive brand name plate (perhaps DeTomaso
or perhaps a totally new name) and a design studio (Bertone is going thru
bankruptcy proceedings) and a design legend (perhaps Marcello Gandini) to enter
into the top tier of car manufacturing if they couldn’t peel Maserati or Alfa
Romeo from cash poor hands of Sergio Marchionne. Such a design/manufacturing
power house could have started by reviving legendary Maserati Ghibli of 1967 –
1973 in case of Maserati, a car sold more units than epic Ferrari Daytona, or
DeTomaso Mangusta of 1967-1971 with its unique butterfly design over engine
department as a fresh entry into exotic super car market while also giving a
hand to Daimler Brand to re-enter the super luxury car market once again with
an updated look after its heart breaking failure a few years back.
A road map along these lines would have prevented AMG and
Mercedes from competing for the same market segment and it would have been a
potential upward expansion of market share. More importantly, image and
integrity of Mercedes Benz cars would have been protected. But I think we will
have to wait for a more progressive leadership at Daimler AG for that to happen
if it is going to happen at all…
