It seems obvious now, but the sale of Chrysler leaves Mercedes Benz in a similar position as it's cross-country rival, BMW. Back when BMW bought the ailing MG-Rover marque, the results, to say the least, were less than positive. When the dust finally settled after the sale of Rover in 2000, the automaker had dropped billions of dollars into the company with little to show for the expenditure.According to an article in Welt am Sonntag, Daimler CEO Dieter Zetsche was quoted as saying that, "there are no acquisition targets I can recognize that could strengthen Mercedes." Obviously, Dr. Z has learned from his own company's past missteps, and will lead Mercedes into the future without the help of new brands to bolster its catalogue of cars.
In the end, the acquisition of Chrysler did little to enhance either automaker's image. Whether it was quality, engineering prowess or long-term growth, the consolidation glut of the past 10 years may have finally come to an abrupt, if not entirely predictable, end. No surprise, as bigger has often proven to be not necessarily better when it comes to the automotive industry.
[Source: Reuters]
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Reader Comments (Page 1 of 2)
Arthur @ May 21st 2007 5:53PM
What will be the first non-Daimler associated product to roll off the assembly line for Chrysler?
KJC @ May 21st 2007 7:05PM
Good news for MB fans. I was surprised MB didn't learn from BMW's/Rover fiasco but the German ego reared it's ugly head.
bmw122487 @ May 21st 2007 7:39PM
finally mercedes has had the rope removed from around its neck and looks to have a bright future.
Brad @ May 21st 2007 8:42PM
Bright future? That's to be seen. They need to get their quality control in order and get their average customer age out of the mid-60s first. The Chrysler merger, for all its bad points, didn't cause either of those problems. Maybe focusing on a single brand will help.
SOhp101 @ May 21st 2007 9:21PM
Thank God finally they've separated.
#4, most luxury car buyers have a very high average age. Lexus is in the upper 60's. Even Toyota is something like 62.
Don @ May 21st 2007 9:36PM
Yeah, they already sucked Chrysler dry...now everyone else is too smart to let Daimler buy them out.
S @ May 21st 2007 10:02PM
Long live Mercedes-Benz!
sd @ May 21st 2007 10:16PM
then what is one supposed to make of Toyota? granted, their growth has been purely organic and not a function of rampant acquisitions
Yago bal @ May 21st 2007 10:23PM
#4: the previous E class is long gone: you should leave the cliché.
Matt @ May 21st 2007 11:16PM
Finally, a pure car company. That was one of the reasons why BMW has been my favorite automaker, a small independent company that puts out quality products. Starting to love MB even more. Good luck and hope there's a bright future for the company.
Barney @ May 21st 2007 11:22PM
6. Yeah, they already sucked Chrysler dry.."
Get off the pot Don. Chrysler has been bad news for a long time. I suppose it was the governments bailing them out, that makes you think they were lucrative. Even governments seen what a losing prospect Chrysler was and doubtfully will loan or grant that company anymore money, ever.
PeakVT @ May 22nd 2007 12:26AM
"Finally, a pure car company."
Come on, you can't possibly be that ignorant. Have you never looked at the MB corporate site? Besides, last time I checked Chrysler wasn't making iPods.
Jim @ May 22nd 2007 3:37AM
Before the DC fiasco, Chrysler was making more profit per car than anyone in the US. Daimler robbed Chrysler to support Mercedes.
Chrysler will be here long after Mercedes dies a slow death in the grips of Lexus...much as I find that distasteful too.
Lexus will own MB, mark it down. MB CAN NOT compete as their production cost are WAY TOO HIGH to go head to head with Lexus.
ANTHONY @ Jun 28th 2007 7:32PM
MERCEDES-BENZ CAN BE A STAND ALONE COMPANY....JUST AS IT WAS IN THE BEGINNING , SO SHALL BE THROUGHOUT IT LIFE SPAN....AND FURTHERMORE....MERCEDES-BENZ IS GOING TO HAVE VERY VERY VERY BRIGHT FUTURE.....SOMETHING THAT WILL ASTONISH THE WORLD GREATLY......THE TIME IS COMING MY FRIEND.......{JAMAICAN GUY}
BE GOOD AND TAKE CARE
Vega @ May 22nd 2007 4:28AM
@Jim:
1. not gonna happen. Production cost is not everything.
2. You're making the standard mistake every American does: The US is not the world. Mercedes (the brand, not DC) sold 1.15m cars worldwide in 2006, only roughly 20% in the US. Outside north america, Lexus is virtually nonexistent.
Big Mike Wood @ May 22nd 2007 8:06AM
If MB can build high quality cars like they used to then they'll do fine. Their cars today are for the most part crap but look how many poseurs line up to over pay for one.
Val @ May 22nd 2007 8:27AM
Last time i checked the new S-class was outselling the 7-series and Audi A8 COMBINED in Germany, and that car still is the benchmark for a large executive saloon. A replacement for the E-class is coming, and the new C-class is already lifting the bar for interior design and quality in its class. And those 3 models are the bulk of their sales, and they are pretty strong. Nobody is going to buy Daimler because of the negative reliability reviews in recent years, no company in the world can afford that, even Toyota. Quality is coming back, production costs are high because of the new technologies and research going on, not to say that toyota are not doing that, but MB is very unlikely to go down the rover or chrysler way.
Tom Design @ May 22nd 2007 5:21PM
Does anyone else remember 4 years ago when the financial news was this: The sales of Chrysler products, notably the minivans and Jeep products kept Daimler from showing serious red numbers in their revenue? Mercedes was losing waves of customers because of their late 90's reliability issues and it was Chrysler's middle price buyers who kept the cash flowing.
Tom Design @ May 22nd 2007 5:26PM
Barney, you are a feisty blogger, but way off base. I respect your willingness to attack even when you're wrong. Chrysler fully paid their loan to the U.S. government ahead of time.
If you want to get yourself educated, read up on the subsidies (read "loans") the Japanese government gives to their automakers in terms of Research and Development kickbacks, protectionism, employee health benefits & retirement, and controlling the yen from being fully valued against the dollar. Now there's some real give away of government money to keep the nation's industries strong. And, Barney, is that such a bad thing?
Barney @ May 22nd 2007 8:08PM
Re 18)Chrysler fully paid their loan to the U.S. government ahead of time.
Tom, the Canadian Government also helped that company out. Shortly after they repaid the loan, they closed a factory. Some of the loan was interest free and a grant as well. I would have prefered to see Canadian tax payers get something back on the investment. A "thank you" when they initaly got the aid just wasn't enough. I would like to see American government help their car makers and they do. There is no Canadian car manufacturer. Daimler did not kill Chrysler. Chrysler will not be standing on it's own feet again. This flux of money is obviously not new to them. Toyota, Nissan & Honda appear to be doing okay on their own but obviously the Japan Government is not bailing out anyone or Mitsibushi, Suzuki and Mazda would be doing a lot better.