Skip to content

For Daimler, 2019 is the year of the new

A new Automotive World strategy report underlines the significant changes facing the Mercedes-Benz Car group over the next few years. By Martin Kahl

Daimler proudly defended its title of premium car manufacturer in 2018, announcing sales that once again beat rivals BMW and Audi. It takes a good look at the data to fully understand the claim, since BMW Group published figures that appeared to tell a different story. At brand level, however, Mercedes-Benz took the title, and Mercedes-Benz Car group reported its eighth consecutive record sales year.

Continuing this successful run over the next few years will require careful corporate, strategic, brand and product management, as the automaker enters a period of considerable change and upheaval. Expect the word ‘new’ to feature heavily.

Assuming shareholder approval is granted in May 2019, Daimler will transition to a new three-division corporate structure. Mercedes-Benz AG will house the car and van operations; Daimler Truck AG will manage trucks and buses; and Daimler Mobility AG will oversee financial and mobility services, with each division enjoying greater autonomy within the Daimler group.

The first production model of the new Mercedes-EQ range was unveiled in September 2018. Production will begin in 2019 of the mid-sized EQC electric SUV, the first of eight all-electric EQ models planned by 2022

A new Automotive World report explores the prospects for the Mercedes-Benz Passenger Car group within this new corporate structure. ‘Strategy update: Mercedes-Benz Cars–2019 edition’ discusses the automaker’s prospects over the five years to 2023.

“The steady upward trend in output that we forecast for Mercedes-Benz Passenger Cars belies the upheaval that the company is set to undergo as it becomes at least partly liberated from the conglomerate shackles of Daimler-Benz, and transitions to a substantial proportion of its range being electrically powered,” said report author, Jonathan Storey.

The new structure will be run by new leadership, with Chief Executive Dieter Zetsche stepping down in 2019 to be replaced by Ola Kaellenius. Zetsche is handing the leadership of the company after 16 years to the group’s board member in charge of R&D, and significantly, Kaellenius will assume both of Zetsche’s titles, namely Chief Executive of Daimler and Head of Mercedes-Benz Passenger Cars. This will not be the end of Zetsche’s influence at Daimler, however—he will return in 2021 to chair the Supervisory Board.

Further change at C-suite level will see the company appoint a new Chief Financial Officer. After 15 years, Bodo Uebber has announced that he will not seek an extension to his contract, which runs to December 2019.

Also new is the Mercedes-EQ sub-brand, the first production model of which was unveiled in September 2018. Production will begin in 2019 of the mid-sized EQC electric SUV, the first of eight all-electric EQ models planned by 2022. The management of the EQ sub-brand could well become a feature of future academic business studies—how to launch and operate an all-new brand within a group that already has an established if relatively unsuccessful brand that could have done the same thing. Should EQ succeed, and the two-model Smart range continue to disappoint, it is easy to envisage the long-expected winding down of the ailing Smart operation.

What will become of Daimler’s relationship with Renault-Nissan? Much was made of the ‘Carlos and Dieter Show’, the entertaining Daimler-Renault-Nissan press conferences held by the two company leaders, and their close personal relationship was a significant factor behind the creation and success of the two automakers’ growing collaboration. However, with Ghosn currently still in custody and no longer in post growing tension between the French and Japanese Alliance partners, and Zetsche stepping down at Daimler, continued close collaboration is far from assured.

Should EQ succeed, and the two-model Smart range continue to disappoint, it is easy to envisage the long-expected winding down of the ailing Smart operation

There’s much more ‘new’ for the automaker to contend with, too. Daimler is forging a path into new areas of business, and has its sights set on leadership in mobility services through its joint venture with BMW. Indeed, the 5Cs—Core, CASE, Culture, Company and Customers—will drive corporate strategy; each is important, but perhaps CASE is the most critical, with connected, autonomous, shared and electric technology being what Mercedes-Benz hopes will set its products apart from the competition.

Despite so much upheaval, Mercedes-Benz still needs to focus on what currently still lies at the heart of its business, namely making cars, and Automotive World’s forecast for the period to 2023 anticipates an increase in output from 2.4 million units in 2019—relatively unchanged from 2018—to 2.66 million units by the end of the five-year period.

“Our expectation, that output will increase, is an on-balance view and nobody should be in doubt of the considerable execution risk that the company faces,” cautioned Storey, underlining the significance of the corporate upheaval coming in 2019 as Daimler rings in the new.

Welcome back , to continue browsing the site, please click here