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Daimler parks Maybach to rev up Mercedes-Benz

The news was a long time coming, but when it came, Daimler‘s decision to wind down its loss-making Maybach brand was hardly a surprise. Speaking in September at the 2011 IAA, Dieter Zetsche admitted that he had failed on his promise to make a decision by mid-year on Maybach’s future; the company would, he said, … Continued

The news was a long time coming, but when it came, Daimler‘s decision to wind down its loss-making Maybach brand was hardly a surprise.

Speaking in September at the 2011 IAA, Dieter Zetsche admitted that he had failed on his promise to make a decision by mid-year on Maybach’s future; the company would, he said, “come up with a decision in the near future”. When asked how, without new offerings in the luxury vehicle segment (ie Maybach), Daimler planned to become the premium market leader and top BMW, Zetsche responded, “I don’t believe the competition between Maybach and Rolls-Royce will decide this race.” He went on to say there would be all-new entrants in several segments, including “S-Class type of cars”, giving the first clear hints that the Mercedes-Benz brand itself could take on the likes of Rolls-Royce without the need for a separate luxury marque.

The Maybach 57 and 62 (the names refer to their length) will remain in production until 2013, but there will be no successor models. Instead, as Zetsche revealed in an interview with the Frankfurter Allgemeine Zeitung (FAZ) published on Saturday, when the next S-Class range, the fifth generation, is launched later that year, there will be six variants to choose from – double the current number, with the company also targeting double the number of S-Class sales.

Daimler took a risk: its chauffeur-driven Maybach limousines would compete with BMW and Volkswagen’s efforts to create an owner-driver experience for their luxury models; Rolls and Bentley models were also easily distinguishable from other vehicles in their ranges

Coming just hours after the company announced an additional €980m (US$1.31bn) investment at its Untertürkheim powertrain complex in 2012, following investments of €670m in 2011, the timing of the Maybach news may have appeared surprising. But it’s no coincidence: that investment forms an essential part of Zetsche’s ambitions “to be number one in profitability and sales in the premium segment” by 2020. And that’s where the S-Class comes in.

Instead of leaving itself exposed at the upper (ie €300,000-plus) end of the market, Daimler intends to extend the S-Class offering across the €100,000-€300,000 segment; this is good news for the 150 Maybach workers (330 at the brand’s outset in 2002), who will be needed for the extension of the S-Class range. Interestingly, the Maybach name appears to play no part, even as a ‘trim level’. Instead, the new range is likely to include several wheelbase choices, including a range-topping model possibly along the lines of the earlier 600 Pullman.

In the end, winding Maybach down – even if it was Germany’s only home-grown luxury marque – was the probably the easiest of decisions to make.

Daimler resurrected the Maybach brand in 2002 in response to BMW and Volkswagen’s acquisitions of Rolls-Royce and Bentley. Daimler took a risk: its chauffeur-driven Maybach limousines would compete with BMW and Volkswagen’s efforts to create an owner-driver experience for their luxury models; Rolls and Bentley models were also easily distinguishable from other vehicles in their ranges, whilst the Maybach models were never far enough removed from their S-Class platform and engine donors. BMW succeeded with its 7 Series-based Rolls, thanks to its visibly different styling and the brand’s well-established place in history, but Daimler couldn’t capture the imagination of more than 200 or so buyers in recent years – less than 20% of the target volumes, and 90% fewer sales than Rolls-Royce and 95% fewer than Bentley in 2010.

Maybach failed to deliver the intended profits and halo effect. Negotiations with other OEMs – including Aston Martin – were indicated, but Daimler’s emphasis on brand equity, plus the sheer power and value of the Mercedes-Benz brand, meant that keeping a luxury brand in-house was the only real option. Couple that with the engineering costs and complexities associated with developing and marketing a sufficiently different vehicle line, versus developing super luxury versions of an existing premium vehicle, and in the end, winding Maybach down – even if it was Germany’s only home-grown luxury marque – was the probably the easiest of decisions to make.

Martin Kahl is Features Editor at AutomotiveWorld.com

The AutomotiveWorld.com Expert Opinion column is open to automotive industry decision makers and influencers. If you would like to contribute an Expert Opinion piece, please contact editorial@automotiveworld.com

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