Mercedes Benz, it is perhaps the biggest name in
luxury cars in the world. Sure, there are Italian exotics like Lamborghini,
stately British brands such as Bentley, Rolls-Royce and Aston Martin, and plenty of
competition in Benz's home country of Germany. But the German make with the three pointed star
logo is for countless buyers around the world. The brand to aspire to. It has a reputation for superb build quality and
excellent engineering. It also has an extremely strong pedigree,
including bragging rights that its founder, Karl Benz, invented the world's first production
automobile. Mercedes Benz has been a dominant force in
racing, a relentless innovator, a symbol of the pursuit of excellence no matter the cost, and for
its buyers, a sign they have finally made it. But today, it faces a new class of challenges. Electric vehicles are coming into the world,
pushed by eco conscious policy makers and at least a few eager buyers. Tesla has become an aspirational brand for
younger consumers, and there is a slew of other EV hopefuls vying for the mantle of the next
generation's aspirational vehicle. Meanwhile, Mercedes said in February that it will
not be offering its electric Oecussi sport utility vehicle in the U.S. for now, even though the vehicle has been in
production since 2019. Mercedes Benz has had a magnificent run, but
those who study the global auto industry say it is undergoing one of the most dynamic and uncertain
periods in its history just a few years ago. U.S. auto sales hit historic highs, but automakers
have had to sink billions into new technologies and contend with a new crop of competitors in the
key Chinese market and around the world. Mercedes Benz has been a leader since the birth
of the automobile. What it does now may determine whether it remains
a leader. Mercedes Benz traces its history back to the 30s
and to three pivotal figures, Gotlieb, Dimler Vilhelm, Maibach and Karl Benz, Dimler for whom
Mercedes long time parent company is named, was an engineer who developed the engines that powered
the earliest Mercedes cars. Maibach, whose name now graces a line of ultra
luxury cars, was the company's first technical director. And Karl Benz was the inventor of what
is widely considered the first true gasoline powered, commercially available car. In addition to that, Benz Dimler and Maibach
participated in the world's first known motor sport event, a 126 kilometer race from Paris to
ruin in 1894, organized by a French newspaper publisher, the event placed
steam, gasoline and even battery driven vehicles side by side. Nine of the 17 vehicles to cross the finish line
had Dimler engines in them, including the first four to finish the race. In other words, there are a few brands that can
match Mercedes Benz as automotive pedigree. That first race began one of the richest
histories in international motor sport. Unfortunately, Mercedes Benz left racing four
decades after a catastrophic accident in 1955 at the 24 hours of them on race, a three way crash
with a Jaguar and an Austin Heeley centa Mercedes Benz car flying into the stands. Somewhere around 80 people died. Mercedes Benz did not return to racing until
1989. As of twenty one Mercedes sponsors, one of the
most successful Formula One teams in history. Its drivers have together won seven consecutive
double world championship titles, the most ever. Its innovations in racing, tech and in cars have
often seeped into its production vehicles. The racing program has also produced some iconic
vehicles, including the 300 SL with its trademark Gullwing Doors, the two seater sports car. It was developed in 1952 and went on to win races
at Lehman Burn Nürburgring and the Karara Panamera. It was released to the U.S. public in 1954. The move was motivated by a U.S. importer who convinced the company there would be
strong demand for the car. It's track success helped the company form a
reputation for superb engineering, quality materials, innovation and execution. They've often been first to market with a variety
of technologies from being the first arguably the first car, you know, to things like the first
diesel engines in the 1930s, the first fuel injected engines in the 1950s with the the 300
Essl. And more recently, a lot of the active safety
systems that were the first with an electronic anti-lock brakes, systems and traction control
and stability control systems. So they they have been a leader throughout their
entire history. Its cars didn't rise to the top by always being
the most feature rich or even the most luxurious. What buyers were paying for was a leaner, simpler
car built very, very well. What you were paying for and what you know, what
the customer was happily paying for was the prestige of having a car that was engineered like
no other car in the world. You were paying for quality. You were paying for engineering. And that was the prestige. It wasn't it wasn't the features. It wasn't the luxury necessarily. It was the it was the engineering, that and
quality that really form the backbone of that brand's image. The company goes to some striking lengths to back
up this reputation for attention to detail. For example, like many other automakers, Mercedes
Benz has its own in-house performance tuning division known as AMG. AMG began as an independent tuning shop that
Mercedes later acquired, but AMG is somewhat unusual in that engines for many AMG cars are
each hand built by a single engineer at a time. Each engine has a plate etched with the builder's
signature. Whenever we do brand image ranking exercises with
consumers without almost without fail, Mercedes Benz always comes out at the top. It's always the top, most aspirational brand,
even even among people that aren't necessarily interested in owning a Mercedes Benz themselves. They still see Mercedes Benz as being at the top. Of course, not everything has been perfect, while
Mercedes is known for excelling in engineering, they haven't fared as well in assessments of
other features, especially electronics and systems such as the Infotainment Control's. Mercedes has also struggled with quality control
issues. The brand's reputation began to take hits in the
1990s, and those persisted throughout the early 2000s. They frankly took their eye off the ball and I
think they got little complacent cut costs a lot and now it takes a long time to. Turn that around, and they did that. We have them with that. They move pretty quickly to rectify these
problems and try tried to avoid doing that again because Yeah, a scientist, cannot afford to lose
their reputation for reliability and solidity without that, that they would struggle. It has also taken some criticism for its repeated
efforts to boost volumes, capture more market share and lure younger buyers by making less
expensive vehicles. Some of Mercedes Benz efforts in lower priced
segments have not exactly been successful. It's a class sport. Coupe was one such model introduced in 2002 and
discontinued in the U.S. by 2006. The company has also at times found itself
challenged by some formidable competition. Its closest rivals or other traditional German
makers, specifically BMW and Audi. BMW has long cultivated a reputation for high
performance vehicles, and Audi has distinguished itself with forward thinking, design and an eye
toward tech features. But other brands have mounted a challenge, too,
including Toyota's Lexus brand. When Lexus was introduced in the United States in
1989, many were skeptical that a high end Toyota could prove a rival to German makers. But by 1991, Lexus was the top luxury import in
the U.S., Going along with the perception that Mercedes is
really at the top of the heap. There's still also the perception that Mercedes
Benz is for people who are older, that it's for old money, that it's for people who have more
stately tastes. And there is absolutely the perception that BMW
and Audi are for people who are younger, younger, affluent people who want to be more sporty and
dynamic. The other concern is that Mercedes sport utility
vehicles don't always seem to inspire the same interest its larger sedans have. Before the U.S. auto market shifted from mostly
traditional passenger cars to SUVs, Mercedes was consistently one of the top three considered
brands. This is largely because the C. Class s class and full size E class sedans were
typically popular vehicles. But Mercedes has dipped a bit, in part because
its dominant SUV, the glee is similar to the Lexus are accurate MDX, BMW, X5, X3, or the Audi
Q5. In the U.S. in 2020, BMW took the top spot and
sales among luxury brands with two hundred seventy eight thousand seven hundred thirty two units. Lexus came in second with two hundred seventy
five thousand forty one. Mercedes, which had been the second place brand
and occasionally vied for first place, fell to third with two hundred seventy four thousand nine
hundred sixteen. To be sure, Mercedes Benz was still the top
seller of luxury vehicles globally in fiscal year 2019. Mercedes Benz is then parent. Daimler saw profits fall by about five dollars
billion, due in part to costs from the diesel gate scandal and heavy investments in electrification. In twenty twenty one, Daimler spun the Mercedes
Benz cars business out of the truck and van business. Now Mercedes is focusing on investing
very heavily in electrification. Like so many other automakers, key markets like
its home market in Europe, the fast growing and essential market in China and even the U.S. market are all pushing for electric and hybrid
cars. Part of their engineering excellence has come from
taking their time out of doing things and trying to get it right. First time. And then we have our competitors like Tesla are
moving more quickly on trying things that maybe some of the traditional automakers wouldn't try. And we have some consumers want this. Not all consumers want it. But there was a lot that that are interested in
that younger consumers of it has to move with the times, not lose on the strengths I have from may
become a little more nimble and more modern in the eyes of younger consumers. And in that new electric car market, there are
brands such as Tesla, which are already beginning to distinguish themselves. McKinsey's Electric Vehicle Index shows Tesla
increased its global market share in twenty nineteen, the most recent year available to
sixteen percent of the total. The largest of any one brand BMW had less than
six percent and Mercedes didn't make the list. Tesla and some local Chinese brands are also
making headway in China, according to a report from Piper Sendler. The three German brands, BMW, Mercedes and Audi
have historically controlled sixty percent of that market. But Tesla, Li Auto and others are on the
rise, and Piper's report said things are only going to get worse. Bottom line, the report said, whenever Tesla
opens a store in a new city. The Germans lose share, and there are still lots
of headroom for opening new stores. Of course, there are many in the auto industry
who think Tesla's future is far from secure. And so far, electric vehicles comprise a tiny
share of total sales in the United States. So what is the threat posed by new brands? Definitely significant. You know, Mercedes Benz obviously is still
perceived as extremely prestigious and and it still enjoys its very top place ranking in terms
of aspiration. But, you know, that can fade over time. Tesla's Tesla certainly doesn't possess the sort
of quality that Mercedes Benz has, but it does absolutely have innovation. When you have what you have upstarts like Tesla,
you know, all of a sudden owning the space of innovation and all that, you know, that
absolutely threatens a company like a brand like Mercedes Benz. Mercedes has delayed the introduction of its
Oecussi electric sport utility vehicle in the United States for now, the company said in
February. But so far, plans to introduce its electric sedan
in the U.S. are on track. And Mercedes says it plans to make
AMG versions of at least some of its electric vehicle lineup, which stand a chance of being
more profitable. The company has also entered into the Formula E
electric racing series, showing that it might still well understand how great automotive
reputations are made.
Tbh with how much some domestics cost now, I don’t see a MB and automatically think “wow they must be rich”
This video is vague and doesn't hit on the main points long enough.
Mercedes is, unfortunately, laughing all the way to the bank with their decisions. However as a car enthusiast there's no denying that Mercedes "isn't what it used to be." At one time Mercedes was one of the most prestigious cars on the road. When you saw one you knew the owner meant business and was pretty well off.
Now? Everybody and their mother drives a Merc. Anybody can lease a lawnmower engine 4-cylinder A-class, GLA, CLA, GLB, GLC, etc. These are people who in the past were driving Nissans and Civics.
Mercedes quality is also sub-par. Their interiors have significantly more hard scratchy plastics than competitors, creaking, rattles, etc. And besides the S-class and AMG 63 line all their dealer inventory is stocked with cheap feeling MB-Tex.
Yeah, I think Mercedes is going to be just fine.
Sorry, I couldn't hear the video through my AMG headset. Can someone summarize?
Not a problem for those who have no money.
In my mind, Mercedes used to be associated with conservative, Old Money types; or the sort of car you bought in your 50s because your career had gone well.
Sometime in the 2000s they became blingy cars for big sunglasses, gold chain, too much aftershave types.
I would say that’s stopped me from wanting to own one, but I was always more of a BMW kind of guy anyway so I’m no loss to its bottom line.
For Mercedes it's more important to get it right than to get it done fast.
Unless Tesla can learn how to put a car together, they aren't much of a threat in North America in the long run. Assuming the other manufacturers come out with comparable electric cars.
Is it though? To my parents, they think Mercedes has a lot more brand prestige than other luxury brands.
Although there’s really no way I’d have a newer Mercedes over an Audi. I hate how over the top and tacky their styling is and their interior quality is hot garbage.