[aveek]

I checked out my friends car yesterday, and I found nothnig really that I could complain about... the car is still fine, with not one problem running. Neither has my friend in Delhi, who bought himself a 2003 S-class... I amiled him yesterday, and he said that there's beeen no problem with his car either...

Strange...

[yukon]

This is late reply but..
Daimler-Benz started having quality problems at its german unit sometime starting a 6-7 years back..
The biggest reason was that BMW was kicking Merc's sales figures in Europe and the US. Mercedes was known to make very reliable cars(until the late 1990's, wasn't uncommon to hear 30 year old mercs running well). But Mercedes top managers decided that they would focus more on innovation to match up with BMW. Quality started going down the tubes. At the same time, Daimler acquired Chrysler and more attention was focused on improving quality and bringing out new models chrysler. In the US, the regular buyers who were buying their 2nd/3rd merc, were finding quality problems like electrical system shorting out when doing 70 miles/hr on the freeway, trunk lids not opening etc. This dragged Mercedes down on the JD power reports. By 2004, Mercedes's quality problems was hitting it where it hurt the most, the bank. Customers were bringing in mercs and the company had to repair them free of cost as it was all under warranty(cost Daimler 1billion $ in the past 5 years in warranty payments). Mercedes's cost base is also 10-20 % higher than BMW but the premium customers are willing to pay above BMW or Audi is only 5 %.

But Daimler management has gotten a hold on Mercedes's quality problems. It knows that if jobs are to stay in Germany, quality has to recover to what it was 10 years back. In late 2004, it made quality the top most priority and results are showing that quality is improving. Chrysler's CEO, Dieter Zetsche is now CEO for the entire group and he was instrumental in bringing Chrysler to profitability in the US. It will take a min of 2-3 years to restore quality.

Here's a related article from the wsj.

Betting on the S

Mercedes Looks to New Model
Of Flagship S-Class to Reverse
An Image of Sagging Quality
By STEPHEN POWER
Staff Reporter of THE WALL STREET JOURNAL

FRANKFURT -- After a spate of quality problems, Mercedes-Benz is counting on a new version of its high-end S-Class sedan to help put the shine back on its three-pointed star.

The revamped S-Class -- long favored by movers and shakers from Manhattan to mainland China -- is still six months from its U.S. debut. But the luxury division of DaimlerChrysler AG is planning a big splash for its flagship model at the Frankfurt Auto Show in September, and has begun to whet American interest by posting photos of the sedan on its U.S. Web site.

The revamped S-Class's exterior borrows styling from the ultraluxury Maybach sedan.

Beyond its new styling and features, the coming S-Class will be a high-profile test for Mercedes on several fronts. One is whether it can follow through on its new commitment to avoid trouble with cutting-edge technology. Glitches in high-tech features such as advanced brakes in recent years have soured some buyers on the brand, and led to recalls that damaged its image as a high-quality maker.

Another challenge for Mercedes is whether its adherence to a rigid manufacturing approach will continue to put it at a disadvantage against BMW AG, its biggest global rival. The assembly line where the S-Class is built in Sindelfingen, Germany, is devoted solely to that model, while the line where BMW assembles its rival 7-Series in Dingolfing, Germany, is configured to allow production of multiple models. That flexibility allows BMW to keep down costs by making more efficient use of its infrastructure, particularly when sales fluctuate.

"BMW has consistently improved its factories and approaches, but Mercedes has kind of lagged behind," says Lars Ziehn, an analyst with WestLB AG in Düsseldorf. "They sacrifice on flexibility because they think they can assure higher quality that way, while BMW focuses on getting the most flexibility out of its plants."

The new S-Class, which is nearly two inches longer and an inch wider than the current version, bears a passing resemblance to the company's super-luxury Maybach model, with its high sill and pronounced tail. The S-Class comes with a seven-speed automatic transmission -- most competing cars have only five or six forward gears -- and seats that provide four levels of pulsating massage.


But other slick features are being cut back. Gone are the electronic key fobs capable of remembering a driver's favored seating position and adjusting the seat automatically -- that innovation worked fine until spouses switched keys. The car also doesn't include a sophisticated type of braking that was common on some Mercedes models in recent years but which occasionally failed to work, prompting a recall of more than 600,000 Mercedes cars world-wide last year.

Instead, Mercedes is playing up high-tech accident-avoidance devices intended to reinforce its reputation as an industry-leading safety innovator. Among them is an optional short-range radar system designed to prevent rear-end collisions by keeping the car at a set distance behind the next vehicle, braking and accelerating as traffic speeds up and slows down. Mercedes officials say the system can reduce the risk of an accident by up to 75%. Other available features include an infrared camera that can extend the driver's visibility to nearly 500 feet.

A successful debut of the new S-Class -- one of four new models Mercedes is launching this year -- is critical for the brand and for DaimlerChrysler, which has relied on Mercedes to generate as much as half of the parent company's annual profit. The S-Class alone accounts for more than a quarter of the Mercedes division's profit.

But burdened by an aging model lineup, Mercedes suffered a 2% decline in global sales last year even as sales boomed for BMW and Japan's premium auto makers. In the U.S., Mercedes sales rose 1.3% last year while sales of Toyota Motor Corp.'s Lexus jumped 11% and sales of General Motors Corp.'s resurgent Cadillac brand rose 8.4%. So far this year, things don't look better: Mercedes' U.S. sales were down 4.4% through June.

Despite its position as the world's best-selling premium brand, Mercedes sales in the United States, the world's biggest auto market, trail those of BMW, Lexus and Cadillac.

Worse, Mercedes, once DaimlerChrysler's cash cow, has become a money loser. In April, Mercedes reported its first quarterly loss in more than a decade, caused partly by quality problems that led to the biggest recall in Mercedes history, covering 1.3 million cars, or a year's worth of sales.

Yet Mercedes isn't going the safe route by eliminating some of the factors that can lead to glitches. For instance, about 90% of the parts in the coming S-Class are new. And Mercedes' cars remain unusually complex; the company now sells about 135 variants of vehicles, compared with 86 at BMW, even though the two companies cover roughly the same market niches and sell about as many cars each year.

Mercedes officials say the high percentage of new parts in the S-Class is needed to keep the car competitive, and that it dedicates a factory line to the model to allow for a faster ramp-up of production. But they acknowledge they are looking at ways to reduce their vehicles' complexity. The company's chief executive, Jürgen Schrempp, told analysts earlier this year that the new S-Class will be the last Mercedes model built new from "bumper to bumper."

"It's important for them to alter the image they've had with these electronics failures," says Walt Madeira, manager for European sales forecasts with Detroit-based CSM Worldwide. Still, he adds, "If Mercedes has the cutting-edge technology and they're one step ahead of the competition, it's one more reason for the customer to justify [purchasing a Mercedes] to his friends and co-workers."

Stan Groenig, a 56-year-old retired Naval officer who lives in the Washington suburb of Annandale, Va., owns three Mercedes, including a 2004 S-Class. He says he doesn't want future models to come with "overly risky" features, and was relieved to learn the new S-Class won't include the high-tech brake system that forced last year's recall.

But Mr. Groenig says he also loves the technical sophistication of his S-Class, citing as an example the way the car's stereo pauses his classical music CDs when the on-board phone rings. "Every other car I've been in stops the CD," he says.

"It's their top-of-the-line model, and there should be new stuff in it that doesn't appear elsewhere," he adds.

One sign of Mercedes officials' confidence in the new S-Class: Its starting price in Germany, about €70,760 ($84,523), is a couple of thousand euros more than that of a comparably equipped BMW 7-Series.
http://online.wsj.com/article/SB112104679370281855.html

[Testarossa]

In my opinion W210 is the worst modern German car which sent the Merc reputaion down the Rhine river. But perceptions are changing after the launch of W212 (Thoughit still cant beat W124) and hopefully it will regain its' rightful place.

[supercars]

Has anyone seen the W212 in Mumbai ?