Mercedes-Benz, the tarnishing act... by Jeremy Clarkson
07-14-04, 12:58 AM
#1
Guest
Posts: n/a
Mercedes-Benz, the tarnishing act... by Jeremy Clarkson
For those that don't know, Clarkson is considered a genius and a god over in Europe. I pay $9.00 a mag for Top Gear JUST for his articles. The man is a genius and shoots it straight. Remember the video of his test on the Crossfire. Perfect.
http://www.topgear.com/content/featu...ishing_act/01/
The tale is recalled by the chief executive of a dealership that sold Mercedes-Benz in London. His salesmen were lounging around the showroom when a small group of menacing-looking undesirables ambled in. They would like to take the AMG M-Class for an extended road test, they said. As the visitors were packing heat, a nervous salesman handed over the keys. The M-Class was never seen again. The chief executive later admitted, "I console myself with the certainty that, sooner or later, the car broke down."
This true anecdote epitomises a major challenge for the car maker with probably the best reputation in the world. Mercedes-Benz's rock-solid image is no longer matched by reality.
In any quality, reliability and customer satisfaction survey, it is generally an average performer, little better than cheaper marques that lack the same elevated status. Sometimes it is much worse. Volkswagen and Audi, two other well-regarded German brands, are invariably middling performers in surveys as well, though Porsches and BMWs are usually well-rated by their owners. Does Germany's fabled engineering expertise bear close scrutiny these days?
The stark disparity between admiration for a brand and the real issues involved in ownership is provided by a survey of over 38,000 members of ADAC (the German motoring organisation) by the AutoMarxx consultancy.
Asked to rank the image of car brands on the market, members put Mercedes firmly top, followed by BMW, Audi, VW, Porsche and Volvo in that order. No other brand was even close. Does one detect a touch of patriotism here? At the bottom, in worsening order, were Daewoo, Lancia, Rover, Subaru, Daihatsu and Suzuki.
However, the tables were turned upside down when members were asked to rate their ownership satisfaction. The top six were Japanese: Toyota, Subaru, Honda, Mazda, Nissan and Mitsubishi. And at the bottom of the chart? In descending order they were: Chrysler, Smart, Fiat, Volkswagen, Mercedes and Land Rover. There have been enough other surveys for Fiat's and Land Rover's positions not to be a surprise. They are the car world's equivalent of junk bonds. The survey's shock is to find Mercedes and Volkswagen competing with them for last place in a country that clearly holds its domestic products in the highest esteem.
While the reports by ADAC and other organisations confirm the superior manufacturing quality and reliability of Japanese brands, they raise serious question about the reputations of some German nameplates. They're not as good as the world thinks they are.
Germany's car makers produce a lot of beautiful, advanced cars that consumers around the world can't wait to buy. Sales of Audi, BMW, Mercedes and Porsche were at record levels last year. The prospects this year look equally good. The appeal is clearly much deeper than quality and reliability. The whole world would drive Toyotas if it wasn't. Design, performance, safety and residual values are important elements in the buying decision as well. And so, more particularly, is prestige. A Renault just won't cut it down at the golf club when a Mercedes-Benz can be bought for similar money.
But there is a weird dynamic in the market if Mercedes-Benz's reputation is still so high at a time when its quality and reliability are so in-different. Is the king wearing any clothes?
The trouble is not imagined. Mercedes-Benz plummeted from fifth overall in the 1997 initial quality survey carried out by JD Power & Associates in the United States to 15th last year. On longer-term reliability, JD Power's US ratings saw Mercedes plunge from top slot at the start of the Nineties to an embarrassing 26th place (out of 36) last year. Jurgen Hubbert, the head of Smart and Mercedes-Benz cars, acknowledged the issue at a conference in the United States earlier this year, when he said the aim was to return to the top of the quality charts by 2006. That's Yes Minister for admitting there's a problem now.
Hubbert said Mercedes has addressed the quality issues and, as each new model comes on to the market, the company will steadily return to its rightful position. At least that's the theory. Seven out of every 10 problems involved electronics, Hubbert said. "Whichever company is in the (technological) lead has the biggest problems," he commented. But Mercedes' problems were more extensive than that. It was simply too stretched to do the job properly.
In the late Nineties, the group embarked on an ambitious plan that totally reshaped its structure and scale. For the first time in its history, Mercedes began to develop new models to pre-determined budgets and timetables. Previously, it worked to what are called cost-plus principles, in which the customer pays for the cost plus profit margin. Cars appeared only when the engineers were satisfied they were right, which could be several months behind schedule. The philosophy all went horribly wrong with the 1991 S-Class and the arrival of much higher standards from other car firms, which made the change decades earlier.
When Mercedes eventually followed the lead, it was just not very good at it. Yet, at the same time, it initiated the development of a whole swathe of additional models, including the A-Class, M-Class and V-Class, together with more coupes and roadsters. The all-new Smart and Maybach projects were launched as well. And it built its first factory in the United States.
Meanwhile, Mercedes' parent group, Daimler-Benz, took control of Chrysler and then bought a major stake in Mitsubishi Motors. Unknown to Daimler, the affairs of both companies were unhealthy, to say the least; including product quality that was well below par. The acquisitions took - and still take - enormous tolls on Daimler management and finances. This was all time and money not spent on Mercedes, whose quality began to suffer as a result.
Like many political and military leaders, Daimler-Benz made the classic strategic error of advancing simultaneously on too many fronts.
These days, though, it is misleading to think in purely nationalistic terms. The global nature of the international motor industry has rendered that concept obsolete.
For example, many of the models contributing to Toyota's number one position in Germany's first JD Power customer satisfaction index were made in Britain and France. The Smart that was the leading 'German' model in the Consumers' Association's reliability survey is assembled in France. The leading 'German' model in the Top Gear/Experian analysis was the BMW Z3, which was made in the US.
Many BMWs, Mercedes and Volkswagens sold in this country are built in South Africa, not Germany. It's not a secret, but none of the companies goes out of their way to explain that fact to its customers. And they, in turn, are happy to believe they're buying German quality.
Elsewhere, we buy Volkswagens from Mexico and Slovakia, Mercedes from Spain and the United States, Vauxhalls from Poland and Australia, Suzukis from Hungary and India and Renaults from Turkey and Slovenia. In the near future, Europeans will have Hondas built in China and Americans will be able to buy Saabs made in Japan and Ohio.
In other words, brand is more important than country of origin when determining car quality. The clever trick by companies like Toyota and Honda is to achieve the same, high manufacturing standards wherever they make cars.
In reality, German firms lost the quality crown to the Japanese manufacturers years ago. The evidence has been public since at least 1981, when Dave Power published his first analysis of car quality in the United States. Since then, a succession of surveys by JD Power and other organisations around the world have regularly revealed how much better made and more reliable the average Japanese car is.
The regular publication of these surveys made public what was previously one of the industry's best kept secrets: comparative data about car manufacturing quality, reliability standards and customer satisfaction. The beneficiaries are all car buyers everywhere, because the effect was to raise levels across the whole industry. For example, the standards of a French or Korean car today are better than those of a Japanese one a couple of decades ago.
The surveys vary by definition, but their results display certain common themes. While, in general, Japanese brands rated best, Mitsubishi, in particular, has some catching up to do. German firms are often only middling performers, though Porsche and BMW owners usually rate their experiences highly. Volkswagen, in spite of its great reputation for solidity, is often below Renault, which has a long-standing reputation for unreliability.
Just as oddly, Volkswagen invariably finishes below the same group's entry-level brand, Skoda. The Octavia finished third overall in the Top Gear survey compared with 106th (out of 137) for the more expensive Golf model on which it is based. Consumers may one day begin to wonder about the wisdom of paying more for a product that is quantifiably inferior.
Fords tend to do better than the Vauxhalls (and Opels) of its big American rival, GM. South Korean and Swedish firms are generally average, but Italian and French brands tend to languish near the bottom of any table.
All too frequently, though, that table is propped up by a certain four-wheel-drive manufacturer from Solihull. Just like some German brands, Land Rover appears to enjoy a charmed existence in the showrooms.
http://www.topgear.com/content/featu...ishing_act/01/
The tale is recalled by the chief executive of a dealership that sold Mercedes-Benz in London. His salesmen were lounging around the showroom when a small group of menacing-looking undesirables ambled in. They would like to take the AMG M-Class for an extended road test, they said. As the visitors were packing heat, a nervous salesman handed over the keys. The M-Class was never seen again. The chief executive later admitted, "I console myself with the certainty that, sooner or later, the car broke down."
This true anecdote epitomises a major challenge for the car maker with probably the best reputation in the world. Mercedes-Benz's rock-solid image is no longer matched by reality.
In any quality, reliability and customer satisfaction survey, it is generally an average performer, little better than cheaper marques that lack the same elevated status. Sometimes it is much worse. Volkswagen and Audi, two other well-regarded German brands, are invariably middling performers in surveys as well, though Porsches and BMWs are usually well-rated by their owners. Does Germany's fabled engineering expertise bear close scrutiny these days?
The stark disparity between admiration for a brand and the real issues involved in ownership is provided by a survey of over 38,000 members of ADAC (the German motoring organisation) by the AutoMarxx consultancy.
Asked to rank the image of car brands on the market, members put Mercedes firmly top, followed by BMW, Audi, VW, Porsche and Volvo in that order. No other brand was even close. Does one detect a touch of patriotism here? At the bottom, in worsening order, were Daewoo, Lancia, Rover, Subaru, Daihatsu and Suzuki.
However, the tables were turned upside down when members were asked to rate their ownership satisfaction. The top six were Japanese: Toyota, Subaru, Honda, Mazda, Nissan and Mitsubishi. And at the bottom of the chart? In descending order they were: Chrysler, Smart, Fiat, Volkswagen, Mercedes and Land Rover. There have been enough other surveys for Fiat's and Land Rover's positions not to be a surprise. They are the car world's equivalent of junk bonds. The survey's shock is to find Mercedes and Volkswagen competing with them for last place in a country that clearly holds its domestic products in the highest esteem.
While the reports by ADAC and other organisations confirm the superior manufacturing quality and reliability of Japanese brands, they raise serious question about the reputations of some German nameplates. They're not as good as the world thinks they are.
Germany's car makers produce a lot of beautiful, advanced cars that consumers around the world can't wait to buy. Sales of Audi, BMW, Mercedes and Porsche were at record levels last year. The prospects this year look equally good. The appeal is clearly much deeper than quality and reliability. The whole world would drive Toyotas if it wasn't. Design, performance, safety and residual values are important elements in the buying decision as well. And so, more particularly, is prestige. A Renault just won't cut it down at the golf club when a Mercedes-Benz can be bought for similar money.
But there is a weird dynamic in the market if Mercedes-Benz's reputation is still so high at a time when its quality and reliability are so in-different. Is the king wearing any clothes?
The trouble is not imagined. Mercedes-Benz plummeted from fifth overall in the 1997 initial quality survey carried out by JD Power & Associates in the United States to 15th last year. On longer-term reliability, JD Power's US ratings saw Mercedes plunge from top slot at the start of the Nineties to an embarrassing 26th place (out of 36) last year. Jurgen Hubbert, the head of Smart and Mercedes-Benz cars, acknowledged the issue at a conference in the United States earlier this year, when he said the aim was to return to the top of the quality charts by 2006. That's Yes Minister for admitting there's a problem now.
Hubbert said Mercedes has addressed the quality issues and, as each new model comes on to the market, the company will steadily return to its rightful position. At least that's the theory. Seven out of every 10 problems involved electronics, Hubbert said. "Whichever company is in the (technological) lead has the biggest problems," he commented. But Mercedes' problems were more extensive than that. It was simply too stretched to do the job properly.
In the late Nineties, the group embarked on an ambitious plan that totally reshaped its structure and scale. For the first time in its history, Mercedes began to develop new models to pre-determined budgets and timetables. Previously, it worked to what are called cost-plus principles, in which the customer pays for the cost plus profit margin. Cars appeared only when the engineers were satisfied they were right, which could be several months behind schedule. The philosophy all went horribly wrong with the 1991 S-Class and the arrival of much higher standards from other car firms, which made the change decades earlier.
When Mercedes eventually followed the lead, it was just not very good at it. Yet, at the same time, it initiated the development of a whole swathe of additional models, including the A-Class, M-Class and V-Class, together with more coupes and roadsters. The all-new Smart and Maybach projects were launched as well. And it built its first factory in the United States.
Meanwhile, Mercedes' parent group, Daimler-Benz, took control of Chrysler and then bought a major stake in Mitsubishi Motors. Unknown to Daimler, the affairs of both companies were unhealthy, to say the least; including product quality that was well below par. The acquisitions took - and still take - enormous tolls on Daimler management and finances. This was all time and money not spent on Mercedes, whose quality began to suffer as a result.
Like many political and military leaders, Daimler-Benz made the classic strategic error of advancing simultaneously on too many fronts.
These days, though, it is misleading to think in purely nationalistic terms. The global nature of the international motor industry has rendered that concept obsolete.
For example, many of the models contributing to Toyota's number one position in Germany's first JD Power customer satisfaction index were made in Britain and France. The Smart that was the leading 'German' model in the Consumers' Association's reliability survey is assembled in France. The leading 'German' model in the Top Gear/Experian analysis was the BMW Z3, which was made in the US.
Many BMWs, Mercedes and Volkswagens sold in this country are built in South Africa, not Germany. It's not a secret, but none of the companies goes out of their way to explain that fact to its customers. And they, in turn, are happy to believe they're buying German quality.
Elsewhere, we buy Volkswagens from Mexico and Slovakia, Mercedes from Spain and the United States, Vauxhalls from Poland and Australia, Suzukis from Hungary and India and Renaults from Turkey and Slovenia. In the near future, Europeans will have Hondas built in China and Americans will be able to buy Saabs made in Japan and Ohio.
In other words, brand is more important than country of origin when determining car quality. The clever trick by companies like Toyota and Honda is to achieve the same, high manufacturing standards wherever they make cars.
In reality, German firms lost the quality crown to the Japanese manufacturers years ago. The evidence has been public since at least 1981, when Dave Power published his first analysis of car quality in the United States. Since then, a succession of surveys by JD Power and other organisations around the world have regularly revealed how much better made and more reliable the average Japanese car is.
The regular publication of these surveys made public what was previously one of the industry's best kept secrets: comparative data about car manufacturing quality, reliability standards and customer satisfaction. The beneficiaries are all car buyers everywhere, because the effect was to raise levels across the whole industry. For example, the standards of a French or Korean car today are better than those of a Japanese one a couple of decades ago.
The surveys vary by definition, but their results display certain common themes. While, in general, Japanese brands rated best, Mitsubishi, in particular, has some catching up to do. German firms are often only middling performers, though Porsche and BMW owners usually rate their experiences highly. Volkswagen, in spite of its great reputation for solidity, is often below Renault, which has a long-standing reputation for unreliability.
Just as oddly, Volkswagen invariably finishes below the same group's entry-level brand, Skoda. The Octavia finished third overall in the Top Gear survey compared with 106th (out of 137) for the more expensive Golf model on which it is based. Consumers may one day begin to wonder about the wisdom of paying more for a product that is quantifiably inferior.
Fords tend to do better than the Vauxhalls (and Opels) of its big American rival, GM. South Korean and Swedish firms are generally average, but Italian and French brands tend to languish near the bottom of any table.
All too frequently, though, that table is propped up by a certain four-wheel-drive manufacturer from Solihull. Just like some German brands, Land Rover appears to enjoy a charmed existence in the showrooms.
07-14-04, 04:20 AM
#2
Lexus Fanatic
Generally a well-written article....not a whole lot I can really add to it except to say that one reason Mercedes went from cost-is-no-object engineering to a strict development budget was obviously the intense competition from Japanese luxury makes who were undercutting them....primarily Lexus but also Acura and Infiniti to a lesser extent. Mercedes was simply unable to maintain previous quality levels using this system, and also by installing electronic safety and convienence features that were not adequately tested for the long-run.
( In fact, had Mazda's planned Amati luxury division not been cancelled by its Ford owners, there would have been even more Japanese competition for M-B ). The Mazda Millenia ( now discontinued ) was originally developed for Amati but ended up being a Mazda....just like the Avalon was originally deveolped as a Lexus but ended up as a Toyota.
( In fact, had Mazda's planned Amati luxury division not been cancelled by its Ford owners, there would have been even more Japanese competition for M-B ). The Mazda Millenia ( now discontinued ) was originally developed for Amati but ended up being a Mazda....just like the Avalon was originally deveolped as a Lexus but ended up as a Toyota.
07-14-04, 04:52 AM
#3
Super Moderator
just like the Avalon was originally deveolped as a Lexus but ended up as a Toyota
Thanks for posting the article, 1Sick
07-14-04, 05:46 AM
#4
Lexus Fanatic
Originally posted by SexySC
Interesting, I didn't know they originally planned the American made Avalon as a Lexus.
Thanks for posting the article, 1Sick
Interesting, I didn't know they originally planned the American made Avalon as a Lexus.
Thanks for posting the article, 1Sick
They are both excellent cars. Consumer Reports.......not surprisingly........remarks on how Lexus-like the Avalon is.
07-14-04, 01:50 PM
#5
Guest
Posts: n/a
Oh I agree, Lexus put pressure as did Acura and Infiniti. Lexus clearly did the most damage but with Benz cars still shaky reliablity wise and with BMWs looking crazy, Acura and Infiniti, IMO, will gain MORE ground.
In all honesty, if Infiniti would offer ALL it's cars with sticks, BMW might be in some more trouble.
In all honesty, if Infiniti would offer ALL it's cars with sticks, BMW might be in some more trouble.
07-14-04, 03:24 PM
#6
Lexus Fanatic
Originally posted by 1SICKLEX
In all honesty, if Infiniti would offer ALL it's cars with sticks, BMW might be in some more trouble.
In all honesty, if Infiniti would offer ALL it's cars with sticks, BMW might be in some more trouble.
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07-14-04, 03:36 PM
#8
Lexus Fanatic
Originally posted by 1SICKLEX
Good point. Seems Infiniti won't be coming until 2007, when the new bodystyles are out and they have a diesal engine.
Good point. Seems Infiniti won't be coming until 2007, when the new bodystyles are out and they have a diesal engine.
The Europeans arren't very adventaraus when it comes to new marques especially in the higher segments.
07-14-04, 03:41 PM
#9
Guest
Posts: n/a
Originally posted by Richie
I think they will have a hard time when to come here in 2007.
The Europeans arren't very adventaraus when it comes to new marques especially in the higher segments.
I think they will have a hard time when to come here in 2007.
The Europeans arren't very adventaraus when it comes to new marques especially in the higher segments.
Since Infiniti has a hard time here being a luxury brand (though turning things around), not sure if that will help in Europe since they can kind of start over (no one really knows what it is) or will it hurt it.
CAR tested a G35, M45 and FX and loved the G and FX. EVO tested a Skyline GT (G35 to us) WITH Nismo parts. They loved it as well and man, it looked EVEN BETTER than stock.
07-15-04, 11:39 AM
#11
Lexus Fanatic
Originally posted by 1SICKLEX
Clearly. Lexus sells pretty badly thought outside the IS and to a lesser extent the GS, the products are not really tuned to Euro tastes. Reliablity is what is winning people over. The hybrid RX will be tremendous there I think.
Since Infiniti has a hard time here being a luxury brand (though turning things around), not sure if that will help in Europe since they can kind of start over (no one really knows what it is) or will it hurt it.
CAR tested a G35, M45 and FX and loved the G and FX. EVO tested a Skyline GT (G35 to us) WITH Nismo parts. They loved it as well and man, it looked EVEN BETTER than stock.
Clearly. Lexus sells pretty badly thought outside the IS and to a lesser extent the GS, the products are not really tuned to Euro tastes. Reliablity is what is winning people over. The hybrid RX will be tremendous there I think.
Since Infiniti has a hard time here being a luxury brand (though turning things around), not sure if that will help in Europe since they can kind of start over (no one really knows what it is) or will it hurt it.
CAR tested a G35, M45 and FX and loved the G and FX. EVO tested a Skyline GT (G35 to us) WITH Nismo parts. They loved it as well and man, it looked EVEN BETTER than stock.
Since allmost 50% of the sales here are diesel engined cars they are missing potentiallyb 50% of the sales.
I am not sure the hybrid RX will be that big of a hit over here. I think it will mostly depend on price and performance.
I'll keep looking for the most up to date info concerning cars we are interested in.
07-15-04, 03:19 PM
#14
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I'm too lazy to do the research myself, but does anyone know the number of cars sold in the U.S. vs Europe vs. Japan? Maybe the reason Lexus won't develop a diesel is because they simply won't earn back the investment.
Mr. Clarkson's article is well-written and surprisingly balanced (for him, especially
). The one thing I would have liked to read more about, though, is WHY Bimmer, Benz, and Rover enjoy such high prestige while producing such, well, crap. It's kind of like some hot new restaurant or nightclub that opens up and builds a huge buzz and develops an enormous following. If you go, you may find the portions are tiny and the service is rude, but BY GOLLY YOU'RE IN! And for awhile you're going to tell all your friends about it and gloss over the bad stuff because you just want to brag that you were at THE place to be. But eventually doesn't the novelty wear off? Wouldn't you rather go to a truly excellent restaurant where you're going to get your money's worth, leave full and satisfied, and look forward to going back? Are BMW and MB like the hot restaurant that's steadily losing business to the less tony upstart down the street but won't realize it until their business model dooms them to failure?
Mr. Clarkson's article is well-written and surprisingly balanced (for him, especially
). The one thing I would have liked to read more about, though, is WHY Bimmer, Benz, and Rover enjoy such high prestige while producing such, well, crap. It's kind of like some hot new restaurant or nightclub that opens up and builds a huge buzz and develops an enormous following. If you go, you may find the portions are tiny and the service is rude, but BY GOLLY YOU'RE IN! And for awhile you're going to tell all your friends about it and gloss over the bad stuff because you just want to brag that you were at THE place to be. But eventually doesn't the novelty wear off? Wouldn't you rather go to a truly excellent restaurant where you're going to get your money's worth, leave full and satisfied, and look forward to going back? Are BMW and MB like the hot restaurant that's steadily losing business to the less tony upstart down the street but won't realize it until their business model dooms them to failure?
07-16-04, 06:12 AM
#15
Lexus Fanatic
Originally posted by 1SICKLEX
Oh I agree, Lexus put pressure as did Acura and Infiniti. Lexus clearly did the most damage but with Benz cars still shaky reliablity wise and with BMWs looking crazy, Acura and Infiniti, IMO, will gain MORE ground.
In all honesty, if Infiniti would offer ALL it's cars with sticks, BMW might be in some more trouble.
Oh I agree, Lexus put pressure as did Acura and Infiniti. Lexus clearly did the most damage but with Benz cars still shaky reliablity wise and with BMWs looking crazy, Acura and Infiniti, IMO, will gain MORE ground.
In all honesty, if Infiniti would offer ALL it's cars with sticks, BMW might be in some more trouble.
I do agree with you, though, that last year's introdustion of the G35 with only an auto-shift automatic was a mistake....a mistake they should have learned from in 2001 when Lexus made the same mistake releasing the first IS300's with E-Shift only.