German Car Zone

The Man Whose Job It Is to Put the Shimmer Back Into Mercedes-Benz's Star

By: Gavin Green

Date Posted 11-21-2005


Dieter Zetsche, 52, takes over as chairman of the DaimlerChrysler group on January 1, replacing the controversial Jürgen Schrempp — who engineered the Daimler/Chrysler "merger" in 1998. Zetsche ran Chrysler before his promotion. In his five years in charge at Auburn Hills, he boosted vehicle quality, sales and profits. Since September 1, following the resignation of rival Eckhard Cordes, he has been running the Mercedes-Benz division.

How much have recent quality problems hurt the image of Mercedes-Benz?
A brand is like a savings account. For most of the past 100 years, Mercedes has paid into this account and built its brand equity. We have withdrawn from that account in recent years. But it is still a strong account and we certainly intend to build it up again in the future.

Yes, there were issues. But I am very grateful for what my predecessors have achieved in improving quality in the past few years. We have made big strides, and our internal measurements show our quality now is the best it's ever been. Clearly we need to prove this to customers. We have to make these quality improvements sustainable and without exception so that every single car we offer to our customers proves we are back on top.

People also say Mercedes-Benz quality has suffered because of your move downmarket with cars such as the A-Class and the M-Class.
Mercedes should always strive for the premium place in whatever segment we compete. If there is room in a sector for such a position, then we should go for it. So, no, I don't think our past strategy with new models in new segments has been wrong.

If we had just stuck with our traditional segments, we may have become irrelevant. The market changes. You have to move with the market.

Can you match Lexus' productivity and quality?
Yes. It is nothing to do with nationality or rocket science. It is consistent, focused execution to clearly defined targets with accountability and responsibility.

Is there any similarity between Chrysler, when you took it over five years ago, and Mercedes now?
No. Five years ago, Chrysler was in crisis with a question over its whole future. That is clearly not true with Mercedes. Five years ago, building the Chrysler brand was a real uphill battle; Mercedes is the strongest car brand in the world. Five years ago, Chrysler had limited new product and little in the pipeline. At Mercedes, we were in the midst of one of the fastest product offensives in our history.

How long will you run the Mercedes brand?
I see no time limit. Even though I did not ask for, or hope for, this development, I am very glad for the opportunity to run Mercedes and to influence the future of this core part of the group.

How long will DaimlerChrysler persevere with loss-making Smart?
A few months ago, Smart presented a new business model with clear bottom-line objectives. The leadership of Smart is totally behind this business model and there are clear objectives for the bottom line. I think it's only fair to give them the chance to deliver on those promises. To date, they are on track.

When is the cutoff for Smart?
Hopefully there is no cutoff — but breakeven is promised in 2007.

Will Smart ever come to the U.S.?
There are three requirements before Smart can come to the U.S. First, it must meet all legal requirements. This will happen on all new-generation models. Second, it must meet customer demands. Third, it must create value and satisfy the business model. When the two latter parts come into line with the first prerequisite, then we move into America. We will make a decision on Smart coming to America next year. The earliest we could come into America would be 2007.

The opposite of Smart is Maybach. How do you assess Maybach's progress?
The market has not developed favorably and we're not happy with that. But we have established a new brand at the very top of the car market. Maybach is not a big risk, though. The volumes and investments are not big. So it is not a major concern.

What are your hybrid plans?
Others were there first, clearly. Hybrids clearly have merits in some circumstances but not others. In technical terms, they are not the solution to the future. I had an encounter the other day with a journalist who assumed that hybrids were environmentally superior in all circumstances, which is obviously not true, especially on freeways or steady speed conditions, when a hybrid is carrying around unnecessary weight and is actually less efficient than a good gasoline car.

The best thing we can do is to make sure we can get to market as fast as possible with the best possible hybrid. Our collaboration with General Motors and BMW to develop a new hybrid system means we can do this.

We have also unveiled two new internal-combustion engines — the cleanest ever diesel to California '08 standards and the most efficient direct-injection gasoline engine, both heading for the United States. Despite the sales growth of hybrids, there is huge potential still in gasoline and diesel engines.

Will DaimlerChrysler have more partnerships, such as your hybrid linkup with GM and BMW?
It is an industry-wide trend. It may be components, platforms, or basic research. As long as your execution is different — as it will be with our hybrid engines — and is authentic to the brand, then partnerships are a good move.

There has recently been a huge product offensive at Mercedes. Can this continue?
The first big offensive was 1993-'97 and now we are in the midst of a second wave. I would hope instead of waves, with peaks and troughs, we have a more constant flow of new product in the future.

We have also unveiled two new internal-combustion engines — the cleanest ever diesel to California '08 standards and the most efficient direct-injection gasoline engine, both heading for the United States. Despite the sales growth of hybrids, there is huge potential still in gasoline and diesel engines.

Interesting. As usual Mercedes won't just jump into direct injection for gasoline engines unless they find a way to make it unique. I wonder if he is talking about the direct-injection version of the new 3.5L V6 that was shown in the hybrid at Frankfurt? That engine produces 292hp before the electrics are added. A 292hp E350, SLK350 etc. etc. sounds good to me.

M

Yeh, seems like they are making some strong moves recently, especially since the beginning of this month, lots of new MB news! Good, perhaps its waht they need, to make a turnaround!

Mitsubishi promoted their GDI (Gasoline Direct Injections) engines like crazy in Europe stressing improved performance, better fuel economy and other benefits. Unfortunately, it seemed the Mitsubishi GDI engines were only "fuel efficient" if one drove like snail and power? What power? I suppose some carmakers kept that story in mind and won't touch direct-injection until they find more benefits to it. Besides, the average Mercedes gasoline engine offers relatively decent power-to-fuel-economy ratio in my experience.

That is interesting. Mitsu probably needed some type of edge to stay alive.

I seem to remember the new Mercedes 3.5L V6 being direct injection when they first showed it, but someone once it appeared in the SLK350 it was no longer direct injection? Does anyone else remember this?

M

Wow, that's interesting to hear. I tought the W123 is still the most "strongest" car ever build.