Suppliers say they know why German car buyers are losing faith in Mercedes - The Unofficial BMW M5 Messageboard (m5board.com)

Millie Miglia · 14th December 2003, 03:52

DaimlerChrysler suppliers say it's no accident that Juergen Schrempp's management legacy is under attack - not only in a US courtroom, but also in Germany in the form of a declining quality reputation for Mercedes-Benz. The suppliers say that since Schrempp took over at Daimler-Benz in 1996 Mercedes has lost its engineering focus and has placed a higher value on cost.

The old maxim that Mercedes over-engineers its vehicles is seldom heard these days.

Mercedes has fallen behind BMW for the first time in the latest member satisfaction survey by the ADAC-Automarxx, the largest German roadside organisation.

Mercedes-Benz drivers gave the company a score of 2.14 on their vehicle and workshop performance - compared with 1.59 for BMW and 1.18 for top-scoring Toyota. The survey uses the German school marking system: 1 is excellent, 5 is very poor.

Complaints about Mercedes-Benz quality are not new. At least since the introduction of the W190 in the early 1980s Mercedes Benz customers have periodically complained that the brand is not what it used to be.

The three-pointed star has been stretched to cover an ever wider range of products, from the family-oriented entry-level Vaneo econobox to the SLR McLaren supercar.

The early models of the W124 E-class ran into quality problems. The A-class tipped over without ESP.

But consumers forgave Mercedes. They had faith that the brand's core engineering values would enable the company to fix any teething problems and deliver cars that were more durable and reliable than its competitors. But that faith now seems to be ebbing.

Sales unaffected, so far

The problem is showing up in surveys, though not yet in sales. The E-class is on track for record volumes. But the luxury market around the world has been one of the best-performing sectors, and for the last several years Mercedes-Benz has under-performed compared with such rivals as BMW, Porsche and Lexus.

The problem appears to be more than just a matter of poor execution of innovations or a drift from the brand values in new models such as the A-class or M-class.

The problem is the product. Rusting doors in the E-class, poor corrosion resistance on the M-class; defective airbags on the C-, E- and S-class and poor reliability of the electronic content of the cars - particularly of the current E-class.

"Mercedes has an astonishingly large number of problems," says German consumer magazine AutoBild.

Mercedes-Benz's share of the German taxi market has fallen from 80% to 60% over the last few years according to the Financial Times Deutschland. That is significant because taxi drivers drive Mercedes not for the prestige but because they are more reliable and durable and have better resale prices than other brands.

In the United States, the resale value of Mercedes Benz has fallen from first to fourth in the Automotive Lease Guide rankings - a critical indicator for the brand.

What happened? Mercedes-Benz suppliers say that since Schrempp took over the car maker has lost its engineering focus and has placed a higher value on cost. The E-class was designed to come in 11% below the cost of the outgoing model - and is now throwing off 50% of the car division's profits, according to analysts.

The brand has reduced its over-engineering and delivered the profits with which to support its sister companies, Chrysler and Mitsubishi, in their time of need.

But even the strongest brands can fade when the value for money proposition that built them up is no longer supported by the products.

AutoBild summed up in its survey: "The legendary solidity of once upon a time is no more."

Mercedes-Benz needs to recover its core values if it is to retain its luxury brand premium in the long term.

Source: SupplierBusiness.com

Millie

MEnthusiast · 14th December 2003, 07:40

by and large people who buy MBs do so because they are "the best".

when they no longer are truly the best, the market will take time to react, but it will react.

Chris Foote · 14th December 2003, 18:52

Wonderful.....so we have BMW who can build a car but can't design one worth a ****, and then we have Mercedes who is designing a nice car but can't build one to save their lives.....ARGH!!!!

katmai · 14th December 2003, 19:20

the big problem is that BMW is just making the same mistake MB made... they're trying to cut costs at all cost. hope it doesn't get that bad...

btw, did you know that MB has big problems with their new SBC braking system?

zzzzMD · 14th December 2003, 20:10

Looks like it's going to be 1989 all over again, when the original Lexus LS400 ate MB's lunch for years. In fact, if I wanted a really nice luxury-ride-at-all-cost sedan, I would definitely buy the new LS430.

MEnthusiast · 15th December 2003, 00:06

yes- the brake by wire system MB has is a big problem. It was partially responsible for why I truly hated driving the SL500 I was loaned. I much preferred driving my wife's 525it! Seriously- I did.

MB has stated it is going to cut back on all the electronics. I think in the end people want a car- not a computer.

bernhtp · 15th December 2003, 02:02

Quote:

Originally posted by MEnthusiast
MB has stated it is going to cut back on all the electronics. I think in the end people want a car- not a computer.

People don't want computers and electronics - they want the features and ease of use, performance, safety and lower maintenance that electronics and computers provide. That is true whether in the engine, transmission, brakes, suspension, or cabin.

In the cabin they want superlative audio, simple Nav, phone integration, simple customization of personal settings, etc. They will eventually want Internet (e.g., real-time traffic integration with Nav), digital music libraries, connection with their laptops and PDAs, etc.

If MB means by their statement that they will make electronics simpler and less obtrusive, then they will move forward in the direction of their clientelle. If they mean they will actually eliminate the electronics and the features they provide, they will appeal to a dwindling market of Luddites.

Tom

MEnthusiast · 15th December 2003, 03:49

Tom,
I dont know what MB intends since they just stated they will be moving away from some of the more advanced electronics- given their problems with complaints about the COMMAND upgrade, and the e-brakes, I cant blame them. They view the electronics as a place where they can cut back being on the cutting edge and gain in the reliability factor.

I cant argue with you about what people want- but I can tell you that it seems reality has a way to go:

Phone integration is about to get worse- not better- since the car companies are tired about phone complaints. there are the few customers who try to return cars because the phone is a letdown. also the car companies cant supply the hottest phone since the phone market moves so much faster. so the end result here is it seems the auto makers will stop offering hands free phones- and ask you to handle it. it shoudnt be too difficult given the vast amount of fm modulators and mics available for phones- but in terms of integration- not looking good. bluetooth has turned out to be a big pain in the neck for the car companies.

simple nav- Id love that too. I believe that will get there.

simple customization of personal settings- the more settings- the more complexity.

I know many people who just get in a car and go- they dont bother to mess with settings of any sort, dont bother to set radio presets- etc. they are the people with the clock on the vcr set to blinking 12:00. My guess is this is the majority of the public.

In the end- people want a car- not a computer- its that simple. they dont want to interact with a computer. if the computers are hidden from view, are reliable, and are unobtrusive, then they will accept that. they want to turn the key and go- not get the "blue screen of *****" that is often found in a computer.

In the case of the e-brakes- thats under the heading of hidden from view- but since they do not behave properly they are now causing MB problems. The fact is- if you hold yourself out to be "the best"- you had better be- and lately they have not been and thats a real problem for them. I think they can get it back- they certainly have the ability to do it- but I think there is something to be said for MB becoming more and more driven by cost cutting. Btw- BMW has also become more and more driven by this- so we will see how they are affected.

vndkshn · 15th December 2003, 05:22

Quote:

Originally posted by MEnthusiast
I know many people who just get in a car and go- they dont bother to mess with settings of any sort, dont bother to set radio presets- etc. they are the people with the clock on the vcr set to blinking 12:00. My guess is this is the majority of the public.

I dunno, if this was the case, then why are all cars coming with more and more and more gizmo's and gadgets? Every high end car, actually any car above the compact/economy (read REALLY inexpensive section of these) cars are also getting more and more loaded down? Even pickup trucks are being overtaken.

So I doubt if that description really fits the majority of the public.

Now the VCR, I finally quit setting mine too, since every power flicker caused it to reset!! In fact, I had mine on a UPS until I finally just tossed it since I never used it anymore!

As for phone integration, I think that is the smart move, just don't offer it. BMW's phones are the absolute worse I have ever seen and heard. Heck, my brother-in-law has one in his 540 that he cannot even get activated without upgrading it first. And since the quality is so bad, he figures why bother? When he or his wife call from their X5, it is impossible to hear them, they sound like they are in a tin can or something.

vndkshn · 15th December 2003, 05:29

In fact, there was recently a show on either TLC or Discovery called Boys' Toys. It was hosted by Jennifer McCarthy (one positive!) It was about some of the future features and technologies. One company demoed their voice control system and it looked amazingly simple. Hopefully (and likely) this type of control will continue to be improved.

I think this is where the customization comes in. If you can customize what buttons do what, the voice commands, and continue developing memory features (remember my presets when I use my key and my wife's settings, etc. when she uses hers).

One interesting, but totally unrealistic thing (from Ford I think it was)... actually moving buttons around! Apparently, if you don't like where a particular button is, you can swap it with any other button. Now, imagine loosing that button!!!