Daimler Must Save At All Costs

Bertel Schmitt
by Bertel Schmitt

“Struggling to match rivals’ scale and efficiency in smaller cars, as well as their success in China, Stuttgart-based Daimler has fallen further behind German peers BMW and Volkswagen,” reports Reuters. Alone by bringing outsourced SAP systems in-house, Daimler wants to save €150 million (nearly $200 million.)

A lot of the work will be done in new Daimler IT centers in India and Turkey.

This is part of a huge austerity program that aims at cutting annual costs by 2 billion euros for the Mercedes-Benz division by the end of 2014. The bulk of the savings must be achieved this year.

Where will the other €1,850 million be saved? Ominously, German Focus Magazin reports that Mercedes-Benz plants in Germany are less efficient than plants elsewhere.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Comments
Join the conversation
8 of 17 comments
  • Inside Looking Out Inside Looking Out on Jun 09, 2013

    They have nobody to blame but themselves. They had opportunity with Chrysler and screwed it up churning out substandard cars. With their level of arrogance towards partners it is unlikely they will be able to make mainstream cars unless they turn Mercedes into mainstream brand. VW and BMW are shrewd in their acquisitions and handling mainstream brands.

    • Jimbob457 Jimbob457 on Jun 09, 2013

      Good observation. Also, quality problems - unthinkable before the 1990's. Is the world's oldest car maker sliding down the long path to eventual oblivion?

  • Wmba Wmba on Jun 09, 2013

    Well, does Mercedes have to have eleventy million models? They're as bad as BMW. AMG everything and an E class "coupe" that's half a C or is it the other way around? Who knows, who cares - the alphabet soup is worse than Lincoln. Rationalize.

  • Hreardon Hreardon on Jun 10, 2013

    Long term, Mercedes and BMW are facing some major obstacles that lead me to believe that they will eventually cease to be independent entities. It's said that Volkswagen spent over $60 billion (with a "b") developing and rolling out their new MQB architecture. That's some serious bucks and you can be sure they're expecting some significant payback on that investment. They're pouring insane money into alternative powertrain options ranging from Audi e-gas to hybrids and all electrics. Major engine overhaul programs (Gen 3 EA888 TFSI powerplants and EA 222 TDI powerplants) and substantial investments in manufacturing and metallurgy. My point is that in order to keep up, Daimler and BMW are going to have to have access to that kind of investment capital and have the volume over which to amortize the costs. It's going to become increasingly difficult for them, along with our friends at FIAT, Alfa, etc.

    • See 1 previous
    • TonyJZX TonyJZX on Jun 10, 2013

      havent Mercedes announced they are sharing tech with Nissan BMW with Toyota? whether this amounts to anything is another matter

  • SixDucks SixDucks on Jun 10, 2013

    Chrysler was an opportunity, no question. Of course it needed a lot of effort, but Daimler would have been better off had they made it work. Keep in mind if things go badly Daimler still has many valuable assets that could be sold off, like their commercial vehicle operations for instance.

    • Compaq Deskpro Compaq Deskpro on Jun 10, 2013

      If Daimler got it right, they would be rolling in dough from the LX cars, trucks and Jeeps. And the CLA, while a crappy Mercedes, could be an excellant Dodge Stratus.

Next