The Rise and Fall... and Rise of Mercedes-Benz...

...I don't know how many of you remember this, but there was a time, not so long ago actually, when the sales performance of the German triumvirate of premium car manufacturers was completely different. By "triumvirate" I'm of course talking about BMW, Audi and Mercedes-Benz, while by "completely different" I'm talking about... completely different.

A little more than a decade ago, the current number one premium manufacturer of the world, BMW, was a distant second to Mercedes-Benz, who had been leading the pack in terms of sales since, well... forever. Audi was so much of a distant third it didn't pose any actual threat to the first two, especially since a lot of people perceived them as an overpriced Volkswagen twin in those times.

Then, a couple of years later, the situation completely reversed. BMW slowly but steadily took the lead, while Mercedes dropped to second and then even to third place, after the Audi underdog managed a very impressive sprint at the beginning of the 2000s. There are various reasons for this rather peculiar change, especially during such a short timeframe, and some of them are more important than others.

Probably the most important reason was Mercedes-Benz's shift in global strategy. Very few people know this, but back in 1994, then-called Daimler-Benz parent company began a colossal project. Known to some insiders as the "Welt Auto" future strategy, it was supposed to make Daimler-Benz none other than the world's biggest car manufacturer, passing even General Motors in terms of sales.

This gigantic effort was supposed to be completed in less than a decade, by mergers and/or acquisitions of other car companies and last but not least by doubling or even tripling Mercedes-Benz's model line-up.

If any of you think this idea was a bit insane, especially coming from a German company known for its traditionalism and uptightness, then you're not alone. In just a few years, Daimler went from having just four car platforms and ten models to almost ten different platforms and over twenty models, spread into three brands, of which two were new under their umbrella (Maybach and smart).

A few more years passed and the "mergers and acquisitions" department at Daimler became as busy as a bee on acid. No less than a stake of 37% in Mitsubishi-Fuso, 10% of Hyundai and a so-called "merger of equals" with the Chrysler Group meant that the Germans were now present in virtually every corner of the world, ready to take any car maker, whether it was European, American or Asian.

However, along the way, something went wrong. Very wrong, actually. What I failed to mention during this short diatribe about Mercedes-Benz's recent history was the fact that the man behind this whole "world domination" shenanigan was a guy named Jurgen Schrempp. Our American readers probably remember him from being at the helm of now-dead DaimlerChrysler until Dieter Zetsche took his place.

Schrempp had had a fabulous idea while at Daimler-Benz, but the way in which he tried to implement it didn't exactly prove to be that great. His first mistake was to neglect the Mercedes-Benz brand, which was technically the entire company's cash cow at the time. The tri-star manufacturer's quality went down at almost the same rate as its model line-up was upgrading. In other words, sales began to suffer, especially compared to their competitors, despite a vast improvement in the number of models they had started launching.

First, they were passed by BMW, but the real surprise came when Audi's ambitions proved to be more than just jabber talk. In a little over ten years, Audi began to slowly separate its identity from Volkswagen, thus becoming a formidable opponent for both Mercedes and BMW. Their future plans actually include rising to the absolute top of premium car manufacturers, leaving the other two in the dust, but that remains to be seen.

The money sucked by the ailing Chrysler branch during the nine year tenure alongside them proved to be an even bigger burden for Mercedes-Benz than the decreasing quality and the "wh*ring" out by expanding their line-up after every letter in the alphabet. The Mitsubishi and Hyundai endeavors were almost as troublesome so Schrempp's plan to take over the automotive world began to crumble like an old cookie.

Having lost money, image and most of all, some of the customers' trust, the Swabian brand did the exact opposite of what its head honchos had hoped for it in the last fifteen years. It went from being a rather elitist and the biggest premium manufacturer to a much more mainstream car maker who is not ashamed to fight for second place with Audi, behind BMW. And to think that about half a century ago Daimler-Benz had actually owned Auto Union, current Audi's predecessor.

In other words, things had began to look pretty gnarly. Until Dieter Zetsche took over the helm of the company, that is. If it's because of Zetsche's famous mustache or some other trickery, Mercedes-Benz has really started to improve back to its original shape in the last four years. Even though their model line-up continues to expand to the point that soon there won't be any letters left in the alphabet to name their models, sales have began to really pick up.

And that's not all, apart from beating Audi in sales (by a couple of thousand units, so far) for the first six months of 2010, their profit margins have began to improve. Last, but certainly not least, their cars are almost as reliable as they were in the "over-engineering era", back in the 1990s. I'm not the one who you should believe, but ADAC's Pannestatistik, while the customer's satisfaction is attested by the JD Power studies, which show a dramatic improvement for the German brand in recent years.

Does this mean Mercedes is following a sinusoidal curve, and are now on the verge of taking back their no. 1 spot? I think so, but it might take a couple or more years for that to happen, since BMW and Audi aren't sitting still either. What do you think, who will be the number 1 premium car manufacturer in... let's say 2015? I'm putting my money on the tri-star, but I've been wrong before...
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About the author: Alex Oagana
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Alex handled his first real steering wheel at the age of five (on a field) and started practicing "Scandinavian Flicks" at 14 (on non-public gravel roads). Following his time at the University of Journalism, he landed his first real job at the local franchise of Top Gear magazine a few years before Mircea (Panait). Not long after, Alex entered the New Media realm with the project.
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