Mercedes Benz Sales Still Plummeting, And It’s No Wonder

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Mercedes Sales PRReports of Mercedes Benz sales seem to vary widely in the news lately. Forbes, Bloomberg, the WSJ and many other publications reveal figures that range from a “break even” proposition, to near devastating auto sales for the first 8 months of this year. However, Daimler AG, Mercedes’ parent company, appears to be turning over every rock in efforts to find new markets, and plug the wounds of previous made decisions. Even the most conservative reports suggest sales are down as much as 49 percent for some models, with only the E Class models showing any promise.

In a statement to Bloomberg, Daimler claimed something on the order of a 9.6 percent drop in U.S. care sales since the previous year. Meanwhile similar reports reveal that sales for September dropped over 13 percent from 2008’s numbers. The company’s biggest losses in sales came in on the wheels of Daimler’s Smart car sales in the U.S., which fell over 54 percent since last year. According to all the numbers (some of which actually claim increases in September?) it appears Daimler only has one model of car which actually makes any money these days – the revamped E Class, which supposedly had a sales increase of over 20 percent.

Investing In Failure

Meanwhile, statements and news on markets outside Daimler’s luxury car aspect reveal what may be classified as either “reaching” on the part of the German company, or in one case “patching” bad decision holes from past manufacturing deals. According to MarketWatch, Daimler is reaching out to Russian truck maker Kamaz for a 50/50 joint venture to produce heavy vehicles for the market there. Interestingly, right along side this news is a graph showing both company’s stocks on decline today? In looking at this deal a little more closely, anyone should wonder at the reasoning behind it in that Kamaz is having major layoffs and other negative indicators of their own. In a report I found, not only is the Russian auto market unstable for growth because of the infrastructure there, but Kamaz has several times of late suspended production at its largest facilities several times this year. Otherwise, banking on the Russian economy at this stage in the game may not exactly be “rocket science” either. News from the World Bank suggests that the recession may be deepening there rather than getting better.

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Denial, The 21st Century Cure For What Business

Back home in Germany Daimler Chief Executive Dieter Zetsche (caricatured left) told the Wall Street Journal he was “more confident than before” that the company would turn a profit this year. While the news carrying this statement claims Mercedes sales are down 17 percent since last year at the same time? So which is it? Perhaps Zetsche’s somewhat “optimistic”, or perhaps delusional, or at worst Machiavellian approach to numbers is indicative of a larger problem?

The Daimler “Russia” connection was what appeared to be a leverage deal for the company to buy almost 50 percent of Kamaz, but Russia’s government’s “bailout” program, and the rules of, pretty much nixed Daimler’s bid to engage in this fashion. Meanwhile, Daimler’s and their last big failed partner (or subsidiary) Chrysler, are in dispute over automotive parts produced by Daimler, and needed for some of the U.S. auto maker’s best sellers. As for Dieter Zetsche, and Daimler’s global strategy, the same Bloomberg article quoted him as suggesting that the China market is where the future of auto sales resides. I don’t know what planet Daimler got these bean counters from, but in case they have not taken note, China has its own set of problems. The last time Daimler engaged that market was with none other than Chrysler, in an effort the sell luxury cars to people walking to their sweat shops.

Chinese People Are Not Beans To Count

It is easy to see why our world is so quickly becoming polluted and is threatened with devastating climactic changes. Daimler and other corporations are headed by people who only see raw numbers and not people. The Chinese auto market is of course soaring in comparison to others in this recession. However, forecasting China as the future of Daimler or any other company is tantamount to claiming Rome did not fall. China, nor the world can long afford further industrialization there. This is however, a topic for future discussion. The point is, are those at the wheel of Daimler capable of making a good business decision, let alone a consistent announcement of what’s going on?

The End Of The Trail – The Customer

This news comes as no surprise to our family here in Germany. We reported several times on a personal situation in which a Mercedes purchase we made turned into both a mechanical nightmare, and one of pitiful customer service from Mercedes-Benz Hess GmbH & Co. KG, in Trier near our home. Without going into the minute details of this whole affair again, suffice it to say Mercedes not only “doesn’t make them like they used to, ” but apparently some of their largest and most profitable dealerships are more concerned with a single Euro than with repeat customers.

After insult and injury from Mercedes Hess officials, accepting a loss on our part, and then having still another Mercedes Hess used car virtually explode on us, this issues has still not been resolved. Guarantees, arrogance, and what appear to be out and out lies still cloud what has already become a time consuming mess. After our last Hess vehicle died on the Autobahn, the company agreed to buy it back and pay 7500 Euro (1000 Euro plus expenses less than we paid them) to end the situation. They never paid the expenses and still hold 500 Euro out without a word of apology to us. Why do I mention this? Well, obviously getting in a jab is on my agenda, but in reality their obtuse and idiotic treatment of news people (because we writers do write), ignorance of the way the Internet works, and in the end caring for Mercedes clients, is just more evidence of a company on decline.

Daimler, not unlike GM, appears to be only a few mistakes away from falling from auto enthusiast grace as well. It seems pretty obvious to this writer (given our personal experience and continual news of bad decisions by Daimler) that predicting the future for Mercedes is fairly easy. Like GM and Chrysler, Mercedes will probably end up dropping models as a first step toward “damage control” in a waning market. On the list? The Smart seems the likely first choice to be dumped. If consumer logic has anything to do with it, the deplorable A Class which we had so much trouble with should be the second to go. Following this, the company probably cannot afford to dump long time “branded” models like the S, E, C and others, but production capacity will likely fall. The problem with Mercedes is the company diverged from what they were once envied for – class luxury and class customer service. They had better get back to their roots or get ready to start begging Berlin for bailout money.

The Public Relations entities that have represented Mercedes Benz include New York based M. Booth, Taylor, and Ruder Finn (out of their Asia offices).

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Comments

  1. Gary Lieffers says

    I take great exception to your comment, “not unlike GM, appears to be a few mistakes away . . .”

    What a piece of crap statement on GM. GM September sales in the U.S. beat the competition again, and gave GM their highest monthly market share of the year. In addition, in all likelihood, the automotive press will be reporting that GM has retaken the global sales lead from Toyota, when they release their global sales later this month. In addition, every new launch or remodel launch over the last 3-4 years has resulted in a permanent increase in market share in the segments they have launched in. GM retail market share is going UP, making up for the reduced level of fleet sales. GM has restructured down to a point where they are break even at 10M SAAR, so it looks like a profitable GM is just around the corner, if our economy is really improving.

    • Phil Butler says

      Gary, I was not talking about what GM is doing now, I was comparing what happened to them with what may happen to Mercedes. Sorry for the confusion, and like you we hope GM pulls a rabbit out.

      Always,
      Phil

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