Mercedes Benz "new strategy"

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I don't follow the German cars too much, but these announcements got my attention.
Mercedes Benz speaks to a new strategy focusing on profitability.

As a veteran of many business meetings, this sounds like a company with issues.
Margins, profitability, desirability, future...
In my opinion, these things ALWAYS need to be at the forefront of business.
The recurring customer stuff is straight outta Toyota's playbook.
I also hear a little Tesla fear in the background...
Interesting.

Mercedes Benz
 

JRed

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Funny thing about the recurring customers -- most people I know that own Mercedes, it's their third, fourth, fifth one. A friend's mom is on her sixth or seventh MB station wagon. She can't get enough of the E-series wagons. Loves the darn things. Luxury car buyers - the ones that can *actually* afford to buy and maintain the cars - seem more brand loyal.

I know a couple where the husband will only drive a BMW 7 series, the wife will only drive a Lexus GX. They've been like that for as long as their daughter can remember.
 
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Telsa cleaned everyones clock in and out of the segments.

What was once dismissed as a joke, and impossible - now has the number 5 selling Vehicle (including trucks and SUV's) in the US and in 10nth place in terms of sales volume and the most valuable.
 
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Suddenly companies like GM jumping in head first a few years back was not as crazy as folks thought.....
 
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Lexus offered better cars for far less money.
they didn’t, they offered a better dealership experience. their cars were good enough for the price but outside of the LS they were never better. MB changed its business model because they learned letting engineers off their leash is a recipe for disaster

As soon as toyota saw the money in SUVs and also practically invented the crossover they made a run for it. today all of lexus’ normal car lineup is complete and total flop except for the ES
 
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That sounds really bad to me, profitability sounds like cutting costs to me.

Not necessarily (although I'm sure we can all agree that mfrs are always finding ways to save pennies). It could be that they'll simply focus their effort on models that do well.

bcg-four-quadrants.png
 
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More cars like the CLA.

Mercedes seems to be adapting an FCA-like business model. Dodge Dart (now defunct) infotainment screens in a Maserati. Probably much more where that came from.

The scary thing is that the CLA looks vaguely like a CLS at first glance and with a focus towards a newer and younger customer, you never know.

Now will they cut the cost of their cars, is another question. More BMW 318ti type stuff...
 
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I don't see what's so alarming about this "new strategy". Everything they listed in their "pillars" going forward seem like healthy business practices. As long as they remember pillar 1, "Think and act like a luxury brand", everything else should just result in a healthier business and not at the expense of quality, including "lowering cost base". If I had to guess, the only thing about Tesla that would make MB scared are the excessive panel gaps and other quality control issues.
 
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I worked with a women that drove nothing but Mercedes Benz cars.
When it came time for a new one the MB free maintenance went away.
So she bought a BMW that offered free maintenance.
A lateral move in her mind.
 
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they didn’t, they offered a better dealership experience. their cars were good enough for the price but outside of the LS they were never better. MB changed its business model because they learned letting engineers off their leash is a recipe for disaster

As soon as toyota saw the money in SUVs and also practically invented the crossover they made a run for it. today all of lexus’ normal car lineup is complete and total flop except for the ES
Lexus DID offer a better car for less money. Having owned MB from the 70s to 2008 I can tell you that MB DID NOT give free rein to the engineers,but to their accountants, the days when the engineers ruled the roost went away long ago. Now MB is sold for "Look what I can Afford" reliability is gone by the way of the Dodo. I moved onto Lexus which, though not as enjoable to drive, is a LOT cheaper to maintain and doesn't brake down at least not as often.
 
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Lexus DID offer a better car for less money. Having owned MB from the 70s to 2008 I can tell you that MB DID NOT give free rein to the engineers,but to their accountants, the days when the engineers ruled the roost went away long ago. Now MB is sold for "Look what I can Afford" reliability is gone by the way of the Dodo. I moved onto Lexus which, though not as enjoable to drive, is a LOT cheaper to maintain and doesn't brake down at least not as often.
They actually did get better about the time you left. Had way less problems with my 2011 E class W212 than my 2008 W211, but I like the W211 better. Has more styling and I can see the cost cutting that happened between the old and new platform. The W211 had the door assist where the doors pop open a little when you unlock it, gone from the W212 but it has better keyless go handles, you could be pretty sure that the keyless go handle would fail on the W211 after 6-8 years or less but the W212 is a better design where there's no rubber where water can get in and corrode the switches. They also got rid of the little business card holder in the newer model. On the newest I hear they even got rid of the bins under the seat, the passenger side came with a first aid kit which I've never used, but probably all the meds in it are expired by now. I also looked at Lexus at one point, it's cheaper because it doesn't offer as many options as Mercedes did. But it appears most people buy Mercedes for the name, not the options, took me 6 months to find one that was loaded, 80-90% of the ones out there are basically base model ones with just two or three options. Pretty hard to find them with 6-8 major options.
 
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That sounds really bad to me, profitability sounds like cutting costs to me.

Not necessarily - it could mean reducing models to fewer but ones that are more competitive in segment.

Making baby budget benzes wasnt a good idea.
 
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Funny thing about the recurring customers -- most people I know that own Mercedes, it's their third, fourth, fifth one. A friend's mom is on her sixth or seventh MB station wagon. She can't get enough of the E-series wagons. Loves the darn things. Luxury car buyers - the ones that can *actually* afford to buy and maintain the cars - seem more brand loyal.

I know a couple where the husband will only drive a BMW 7 series, the wife will only drive a Lexus GX. They've been like that for as long as their daughter can remember.

Some people love MB and some are one and some with them. Admin at my work has a s55 and s550. She likes them. I see other folks with short lease and then they're on to something else. The cheaper MB seem to be held in low regard so it's probably best that MB focuses more on their higher priced cars.
 
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Feel the change in the wind. A statement like from MB that is nothing but trouble for Tesla. Party might be over.

Doubt it. Sure we'll see more competition to Telsa.

Take VAG's latest the ID3 is a much slower, lower performing ,buggy, slower charging car that only manages to match the model 3 in terms of kwh/ mi at 55 MPH. Its interior is woefully cheap.

Mercedes EQC was so far behind they didnt bother to launch in the US after the Etron got its clock cleaned.

Then there is the matter of actually making money on an EV which no one but Tesla has figured out how to do yet.

UD
 
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