THE AUTOEXTREMIST

August 3, 2011

Uncle Dieter gives his troops a wake-up call, but is it too little, too late?

By Peter M. De Lorenzo

(Posted 8/1, 12:30 p.m.) Detroit. Once upon a time there was a car company by which all others were judged. A car company that could trace its roots back to the very beginnings of the automobile. A car company that marched to its own drummer and engineered its cars with a passion and a point of view that was so laser-sharp and unflinching in its focus that it left its competitors in awe and provided its customers with a level of satisfying serenity through ownership that was simply unrivaled.

This company’s legend was solidified in the American mindset when our troops returned home from World War II, boasting about the fabulous machines they saw and drove while in Europe. Majestic machines with a presence and poise, and with a level of performance and sophistication the likes of which they had never seen before.

And though this company was indeed legendary in its homeland, only the most discerning automotive aficionados embraced and coveted its models here, because they were expensive to buy and even more so to service. It was only when its New York-based U.S. advertising agency crystallized this car company’s passion and dedication into words with one of the most memorable automotive advertising themes of all time - “Engineered Like No Other Car in the World” - that the brand came into focus to a wider American audience, and Mercedes-Benz became the symbol of superior German automotive engineering, representing the pinnacle of motoring and the most desirable automotive brand in the world.

And then, as they inevitably do in this business, things got weird.

Burgeoning challenges from amped-up competitors emerged as first BMW and eventually Audi stopped cowering before the Mercedes-Benz “three-pointed star” and started building magnificent machines of their own. Yet Mercedes soldiered on, smugly confident that their automotive superiority would ultimately win out, as it always had before. Even when Lexus came on strong in this market and started churning out its particularly benign stew of vanilla-ized automotive luxury, Mercedes-Benz executives scoffed at the idea that they would ever be dethroned from their lofty perch as the automotive world’s greatest luxury brand.

But ironically enough, it wasn’t its competitors that derailed Mercedes-Benz, it was a legion of MBA-infused, new-wave marketing executives who infiltrated the company and decided that the brand needed “updating,” that its rigid stance had allowed competitors to sweep in and take away market share because the brand was too intransigent in its thinking and needed to get with the reality of the new automotive world in order to retain its competitive stance in the market.

And to put a finer point on things, the arrogance that made the “old” Mercedes-Benz so good in terms of product unfortunately was overwhelmed by a new and much more dangerous kind of arrogance, one fueled by marketing “experts” who made light of the sanctity of the brand and who were completely clueless as to just how difficult it was to sear a memorable image and ad theme in the consumer mindset. In other words, they knew better. Or so they thought...

And thus the sublime “Engineered Like No Other Car in the World” gave way to the completely forgettable “Unlike Any Other,” a paean to milquetoast mediocrity that was completely derivative and uninspiring. It was to make Mercedes more “approachable” to consumers in the market while instead it damn near blew the brand up for good. And, as if right on cue, Mercedes-Benz products became predictable and derivative themselves, as all vestiges of product vision and true automotive leadership gave way to “me too” engineering and abysmally uninspired designs that sent consumers packing for the welcoming confines of BMW, Lexus, Audi and even Cadillac showrooms.

And then to make matters even worse, Mercedes-Benz quality went into the tank, which not only left a giant window of opportunity for its principal competitors to drive through, it pissed-off legions of its loyal owners who for the first time in their lives started checking out the competition. And many of them would in fact not return to the brand again.

The brainiacs in Mercedes-Benz marketing then offered up another ad theme gem, this one even more confounding than the one before. “This is Mercedes-Benz” was to crystallize the “new” Mercedes-Benz for consumers while occasionally paying homage to the “old” Mercedes-Benz and its historic imperative. It said nothing and it meant nothing, and not surprisingly, it failed miserably.

I will say that the term “German automotive marketing experts” ranks right up there with “capable Washington politicians” at this point. I have watched for years as so-called German marketing “experts” came over here to “fix” what ails their brands in the American market, only to watch time and time again as a particular degree of abject futility unfolded that left me dumbstruck.

(Another example of German marketing futility? You only have to look at BMW’s marketing “experts,” the ones who took another of the great automotive themes of all time – “The Ultimate Driving Machine” – and reduced it to the sniveling, mewling, pathetically incongruous “Joy” to understand what I mean. These guys just basically don’t have a clue, yet they retain every drop of arrogance in spite of it. Nice.)

Back to Mercedes-Benz. To understand just how far this once-heroic automotive brand has fallen, Daimler CEO Dieter Zetsche has recently sent out an internal memorandum to the Daimler troops saying that the brand will challenge its two most heated rivals – Audi and BMW – for supremacy as, according to Automotive News Europe, the world’s best-selling and profitable luxury automaker.

That Dieter Zetsche actually has to send out a memo to his troops saying that they will challenge their rivals is the first time in modern history that Mercedes-Benz has acknowledged that they aren’t the big dogs anymore. Yes, it’s an internal document but even still, the years of mind-numbingly stupid marketing calls combined with taking their eye off of the proverbial ball when it comes to product have scorched Mercedes-Benz to its very core.

Ah, but just in case you wondered, the old Daimler arrogance is still present and accounted for, as Zetsche says in his cheerleading memo, "Some of our competitors are now growing faster and more profitably than we are. Granted, those are just snapshots in time and should not be overestimated. After all, many of our best new products are yet to come."

Uh, earth to Dieter, come in. Snapshots in time? Are you kidding me? While you and your arrogant executive team stumbled your way through the last five model years your chief rivals were opening up a can of whup-ass on you. That’s not “snapshots in time,” that’s a serious beat down and you better acknowledge it because it’s real.

The fact that Zetsche realizes what’s going on enough to feel compelled to issue a memo like this says a lot, I’ll give him that. It’s kind of a “Holy Shit!” admission for all of his troops to see so that they can get their heads out of the clouds long enough to realize that they have a real fight on their hands, and that nothing can be taken for granted anymore.

And remember, this isn’t a sleepy little industry by any means, it’s populated with ferocious competitors who don’t much care about quaint notions like prior industry standing, because they’re out for blood and they’re out to win. There’s Audi, BMW, Cadillac and Lexus competing with everything they’ve got. And let’s not forget about Hyundai, who in less than five years will be right there in the mainstream luxury fight.

By the way, the new Mercedes-Benz ad theme is “The Best or Nothing,” which was founder Gottlieb Daimler’s guiding principle. I think it’s a very good way to go if they don’t plan on bringing back “Engineered…” but still, it also puts the onus on Mercedes-Benz to deliver the goods, and then some.

Does Mercedes-Benz make great cars? They absolutely do, and some of their new models coming do look impressive, I’ll give Dieter that too. In fact we just drove a E550 and even though it can’t be considered the latest and greatest from Mercedes-Benz, we were impressed with its poise, solidity and overall performance, an outstanding machine.

But then again that’s really not the problem with Mercedes. They can build great machines when they set their minds to it, they just don’t realize how damaging their “image waffling” has been to them. They allowed their so-called marketing geniuses to run amuck and the result is that even though Mercedes-Benz is still very much in the thick of the luxury fight, they’ve lost their mojo with the consumer public and they’ve squandered one of the greatest automotive legacies of all time.

I really can’t recall another example in the history of this business where so many have done so little with so much to work with.

And that’s a heaping steaming bowl of Not Good.

As for the accrued status and legendary persona that Mercedes-Benz once enjoyed in this market? It’s long gone. As German luxury brands go, right now Audi is smokin' hot and BMW is still swinging for the fences, while Mercedes-Benz reminds me a lot of the bad old GM, the one that didn’t see the train coming until it was far too late. So how the Daimler troops respond to Uncle Dieter’s wake-up call will be revealing and pivotal.

The reality for Dieter Zetsche and his newly-energized Mercedes-Benz troops is that right now Mercedes-Benz is just another car company fighting for its piece of the action.

And they have only themselves to blame.

That's the High-Octane Truth for this week.

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