[ajmat]

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German taxi drivers no longer hail a Mercedes
By Richard Milne
Published: February 16 2005 18:46 | Last updated: February 16 2005 18:46

Visitors travelling by taxi to the DaimlerChrysler headquarters in Stuttgart used to have one choice of vehicle: Mercedes. The same was true throughout Germany. But on visits in the recent wintry months, the taxi rank has usually been headed by a Volkswagen, Opel or worst of all a Mazda.

Jürgen Geier, a Stuttgart taxi driver who used to drive a Mercedes before switching to Audi, explains: “Mercedes has really gone downhill in the last few years. I have colleagues who had to take their cars to be repainted practically every week. They have got a lot of work to do to gain their reputation back.”

This anecdotal evidence, albeit from the heaviest users and sharpest critics of cars, highlights the trouble in which Mercedes finds itself. Its reputation for quality lies in tatters as it has been forced to admit that its cars, which once set the industry standard for reliability, are prone to breakdown.

Last week the Mercedes Car Group, which includes the lossmaking Smart small-car brand, reported its worst quarterly profit for 13 years and admitted that this year might be even more challenging. It even suffered the ignominy of seeing its profits overtaken by Chrysler, the previously struggling US mass-market carmaker that merged with Daimler-Benz in 1998.

For Germany's taxi drivers, this comes as no surprise. “Opels [made by General Motors of the US] are half the price of Mercedes and the quality is now the same,” says Anis Ahmad, a Frankfurt taxi driver with an Opel Zafira. M Daim, who drives a Mercedes from the 1990s, says: “This one is top class but, when I replace it, I won't buy Mercedes again.”

The German Taxi and Hire Car Association (BZP) says that Mercedes' proportion of new taxi sales has fallen since the turn of the century from 70 per cent to 50 per cent. Simultaneously, VW's market share has risen from a tiny proportion to more than 20 per cent and is expected to grow further when it reports figures next month. Opel has benefited from an aggressive push into the taxi business that included offering attractive financing deals.

“Quality at Mercedes played a role in this,” says the BZP. “There were so many problems, particularly with new technology.” Partly as a result of cramming so much gadgetry into its cars without checking whether it all functioned together, Mercedes has slipped in the past decade from first to 28th place in the respected JD Power reliability survey.

“We are seeing things that should not have been allowed to happen in terms of quality,” says one London analyst. As a result, Mercedes' operating margin in the fourth quarter dropped to a miserly 0.16 per cent compared with one of about 7 per cent in the previous quarter for great rival BMW.

Daimler executives have tried to strike an upbeat note. Jürgen Schrempp, chief executive, said last week that the situation would be under control within a year. Eckhard Cordes, the new head of Mercedes, claimed that the cars now leaving its factories were the best quality it had ever made. But analysts at Morgan Stanley estimate that resolving the issue, which Mr Cordes inherited last year from Jürgen Hubbert, his predecessor, will cost €500m ($649m) a year.

Most analysts expect the company to gain control of the situation eventually and regain some lost clients. Taxi drivers may be among the hardest to woo back. Mercedes gained its dominant position thanks to the durability of its cars perhaps best displayed by a Greek taxi driver who clocked up 2.8m miles in his 240D model. But as the technology failings have piled up, so other reasons have helped erode Mercedes' market share for taxis chiefly the poor domestic economic climate during which many drivers have seen their takings halve.

“Price, as ever, also had something to do with it,” the BZP says. A €20,000 Opel Zafira or VW Touran, both of which will seat seven people, make more economic sense than a €40,000 Mercedes. “Clients don't care and we can earn more [through the added space],” says Mr Ahmad.

However, second-hand sales of older, more reliable Mercedes models are booming in the German taxi market, says BZP with the result that 70 per cent of all taxis still bear the famous star logo

[RX135]

Form is temporary, class is permanent. Hail Mercedese!

[Shan2nu]

Mercedes has really gone downhill in the last few years. I have colleagues who had to take their cars to be repainted practically every week.

WOW!!! From 5 star to "tri-star".

Shan2nu

[GTO]

The only surprising factor is that they took so long to realise! Any businessman wants a return on investments, and a Mercedes will not only diminish your investments in itself but also the others you had invested elsewhere.

GTO

[RX135]

Looks like GTO's honeymoon with Merc is long over and things are close to divorce now

[RJK]

Yup..he sounds like one big dissatisfied Merc customer. He has a very valid point though. You don't pay that much money to take a headache.

[islero]

I'm not surprised, been noticing so many letters in foreign mags complaining abou the orange-peel paint on Mercedes.

[Rehaan]

Originally Posted by RX135

Looks like GTO's honeymoon with Merc is long over and things are close to divorce now

He made that comment from a purely business point of view.
If it were about engineering and love he would never say that! lol

R

[Deeps]

Originally Posted by Rehaan

He made that comment from a purely business point of view.
If it were about engineering and love he would never say that! lol

R

I agree! Mercedes still keep setting new standards in the automotive world. However, i'd still opt for a BMW than a Merc!

[maedi]

Quoting from an article i read a couple of days back,

Last year, the Mercedes brand ranked 27th -– below Chrysler -- in J.D. Power's vehicle-reliability survey, with an average 327 problems per 100 cars. The quality problems that have dogged the Mercedes brand for the past few years are requiring extensive investments to repair, sapping profits. And industry experts say the losses at smart aren't easy to fix quickly either -– short of selling the division, a move Schrempp has ruled out. Morgan Stanley forecasts Mercedes profits will fall by an additional 50% this year, to $1 billion.

View the complete article at:
http://www.adinfo.businessweek.com/b...6048_db039.htm

The bad EURO-USD rate isnt helping their cause either...

Maedi

this has a lot to do with the fact that the company is run by its board and by its accountants unlike BMW ( sorry ,,but im a fanatic lover) ,,which is run by petrolheads,,
in this context a website worth checking out is * www.bmwfilms.com * ,, it lists some really serious film stunts using beemers,,and www.bmwm5.com,,often rated as the fastest 4 door saloon car in the world

[lamborghini]

I so agree that Mercedes quality has dropped but guys it is not all that bad.
My merc is keeping up quite well and i like it alot but then again, the new mercs have better quality now.
The ones in the middle like the W210 had a quality drop but the W211 is a notch higher.. though still a notch lower then the W124.

[kavit]

the "tristar" is on the fall guys. its about time people dropped the status factor while choosing cars

[Steeroid]

Originally Posted by ajmat

.......................................

But on visits in the recent wintry months, the taxi rank has usually been headed by a Volkswagen, Opel or worst of all a Mazda.
...............................

Worst of all a Mazda? Typically snooty European remark! Whats wrong with a Mazda, I wonder? The name?

[Beemer]

Originally Posted by Deeps

I agree! However, i'd still opt for a BMW than a Merc!

Yup , a BMW is always a better choice than a merc , espically for the Youths .