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Old 21st July 2004, 05:40   #1
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This article talks about the issues maybach as a division of mercedes is facing in making targets etc..

they were planning on a coupe but since the sales are lower than expected the merc board has asked the prog director to make money before talking about the next step..

nice read..

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22.03.2004. Maybach Learning Some Costly Lessons



Slow start leads DaimlerChrysler division to rethink long-term strategy.
by Paul A. Eisenstein

Life's little lessons can be costly - especially when you're launching a new brand into one of the most rarified segments of the automotive market.

DaimlerChrysler's new Maybach marque has gotten off to a slower than expected start due to skeptical buyers and a global economic malaise. That has forced the automaker to rethink its strategy for the high-line brand, starting with its sales forecast, company officials concede. But they stress that DaimlerChrysler remains committed to the Maybach project.

"We have had to learn several lessons" since Maybach launched last year, Leon Hustinx, director of Maybach sales and marketing operations, acknowledged during an interview with TheCarConnection.com.

In all, Maybach delivered about 600 cars worldwide during 2003, Hustinx revealed. While he agreed that was short of the target, he declined to say by precisely how much. Longer term, Maybach had intended to sell a minimum of 1000 cars a year at prices running north of $300,000 apiece.

Now, said Hustinx, "I don't think 1000 is realistic."

The shortfall reflects a slow launch, especially in the critical U.S. market, which is expected to provide the lion's share of customers for Maybach's two models, the M57 and M62 sedans.

Several factors contributed to the rollout delays, including quality problems with suppliers providing the high-line woods and leathers used to cocoon Maybach's affluent and demanding passengers.

"With a luxury brand," said Hustinx, "you can't take shortcuts." The DCX division was forced to switch some of its supplier "partners," delaying production. "It has taken us about a year to get things right," the Maybach executive revealed.

Back at the top?

The Maybach project dates back to the late 1990s, when DaimlerChrysler began exploring the idea of competing with the likes of Rolls-Royce and Bentley. It decided not to push the Mercedes-Benz brand upmarket, opting instead to create an entirely new nameplate - or, more precisely, reviving an old one.

The new brand takes its name from Wilhelm Maybach, the first chief engineer for Gottlieb Daimler, one of the founders of what later became Daimler-Benz and now DaimlerChrysler. Eventually, Maybach formed his own auto company, and from 1921 to 1941 produced about 1800 luxury cars, some of the most lavish and technically sophisticated of their era.

The automaker hoped to reclaim some of that past glory, but it hasn't proved as easy as first thought. "If you have a brand with 60 years missing, it takes time to reposition it," conceded Hustinx, adding that "Outside Germany, people didn't know the brand."

Maybach's heritage "doesn't really mean anything in the modern world," echoed Dr. David Cole, director of the Center for Automotive Research, in Ann Arbor, Mich. He believes Maybach's problems are compounded by a variety of factors.

The Maybach project was first conceived during the boom years, when the worldwide ranks of the super-rich mushroomed. But that was before the dot-com-bust, stock market slump and a general economic malaise struck most of the world's major markets.

Compounding the situation, a variety of other manufacturers decided to go after the same market. No longer partnered, Rolls and Bentley have launched new products and raised their sales targets. Ford Motor Co.'s Aston Martin set out a fivefold growth plan. And other high-line players, such as Lamborghini and Bugatti, also took aim.

All told, the various entrants would need to sell nearly 20,000 vehicles a year priced above $150,000 to meet their targets. While less than 0.1 percent of the total global automotive market, that's still nearly three times the segment's previous record.

Some are succeeding. Ferrari has waiting lists of two years or more, and Lamborghini is struggling to meet demand for its Murcielago and Gallardo models.

But high-line sports cars, such as the new Ferrari 612 Scaglietti, appeal to those "used to glitz and flash and who enjoy showing off," said Cole, while stately vehicles, such as the huge Maybach M62 "are driven by fairly conservative people." And such buyers seem increasingly reluctant to flash their wealth, suggested Cole, "because of concerns about crime and terrorism."

Many potential buyers also prefer not to stand out, particularly in socially conscious Europe, where buyers often remove the badges from high-line products such as the Mercedes S-Class. "People say they would love to drive our cars but can't," said Hustinx, "because of jealousy and envy."

A different world

While the marketing chief acknowledged that "the world is different from what it was" when Maybach was conceived, he and other company officials remain confident their new brand will eventually succeed. They're refining marketing techniques, focusing on building "relationships," rather than using traditional advertising tools, explained Hustinx.

Maybach stages a variety of entertainment events and other gatherings for owners and solid prospects, hoping to build networks through word-of-mouth. "You have to find your customers, and if they're happy, they'll bring you your next buyers," explained Hustinx.

Maybach is beginning to attract some high-profile customers, he hinted, in the Mideast, as well as in the entertainment world. Hustinx declined to provide names, though its been reported that actor/director Clint Eastwood was seriously interested in Maybach. And singer Alicia Keys is one of those who signed the guestbook at the Maybach factory near Stuttgart, a facility often visited by buyers.

To expand Maybach's appeal, there's been talk of adding a third model, perhaps to compete with Bentley's $150,000 Continental GT sports car. But for now, any such project is on hold, said Hustinx, noting, "The board tells me first make money and then we talk again."

Hustinx insists that by the end of the first ten-year product cycle, there'll be a "black zero" - break-even - on Maybach's bottom line. And by the "beginning of the second ten-year cycle, we'll make money."

There are plenty of skeptics, however, and even the more bullish observers warn there may still be more changes needed to make the Maybach strategy work.

www.thecarconnection.com


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Old 21st July 2004, 17:06   #2
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Conveniently (and not surprisingly), they have missed out one major reason for the disappointing sales - Most people think of the Maybach as nothing more than an S Class on steroids!

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Old 23rd July 2004, 03:39   #3
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Well welll well my prediction of things going all wrong with so many super luxury cars is going true.

It happened in the late 80s when the markets crashed in 89-90. Its happening again. I dunno what got onto Maybach to believe that the market would magically expand to accomodate all of them, since at that end you always had only the Rolls and Bentley of which Rolls did atleast a 1000 a year comfily while the Bentley did some xxx nos.

Daimler Chrysler's prediction was far too bold. Seriously thinking that they and Rolls together could sell 2000 cars in bleak times when the market (i.e Rolls) sold 1000 of them during hay-days is committing hara-kiri.

And honestly i am not even half-surprised that they are one of the victims. Maybe Merc has realised its fallacy, which is why the SLR production of 2000 spans over a few years (5?).

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Old 23rd July 2004, 03:42   #4
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Oh and did i forget to add. The so-called sold out M3 CSL, isn't sold out yet!

There are 50 odd RHDs still available in UK, for sale at a discount. One year after its launch, BMW hasn't been able to sell the 1500 odd it manufactured. Looks like this disease is afflicting all.

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Old 23rd July 2004, 04:21   #5
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And yeah even cheaper supercars were highly priced eg. galladro and continental gt @ the time of the launch, but now, you can get a brand new galladro for about 120k euros and I am sure you can haggle that down atleast 5-7k euros..which makes it an awesome buy for people with a little money...but this segment seems to be really selling I guess cuz too many car companies have joined this segment...time will tell i guess..i saw a murcielago 2003 0km on the clock selling 30k cheaper than actual retail, can you belive that..and there also you can haggle..its good fro ppl who find such details..i guess..but it wouldnt take too long before people start to spend money all over again..these cars are 66% meant for people who have a ton of money and their forutnes dont decrease with some bad economic times..so its going to take a little time before these guys come back to the market and the rest 33% new rich ppl would probably come around too in sometime...cuz if you look at it the number of rich ppl in the world keep on increasing : )

but yeah, how stupid must the maybach executives be feeling when they saw their expectations being crushed..

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Old 23rd July 2004, 12:25   #6
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problem is the economy is cyclic, when things are good, people design extravagant cars, by the time they come out, the downturn appears hence the glut
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Old 26th July 2004, 16:01   #7
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I think they screwed-up the styling, especially the Santro-ish grill doesn't help it one bit...



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