03 Jan 2017 | 03.36 pm
Dr Z Takes Mercedes To Pole Position
Merc sales up after Dieter Zetsche’s casual makeover
03 Jan 2017 | 03.36 pm
Apart from the example of Mattress Mick, and since the death of Steve Jobs, it’s hard to think of a company boss who is, or has become, the brand, the face, the name. But suddenly, now that Mercedes-Benz has outstripped its German rivals and sells more luxury cars than either BMW or erstwhile giant killer Audi, there is a new kid who fits that description.
He is Dieter Zetsche (pictured) and he wears skinny jeans, sneakers, an open-necked shirt and a royal blue linen blazer for company presentations, but five years ago the Daimler boss stood on a stage in a dark grey suit and a tightly knotted light blue tie, doing his best to talk up the prospects for Mercedes-Benz, which had been trailing rival BMW for six years and whose sales had even slipped below those of Audi in 2011.
For in those five years, and four years earlier than Zetsche promised in 2011, Mercedes-Benz has outstripped its German rivals and now sells more luxury cars than either BMW or erstwhile giant killer Audi.
Quite an achievement, after BMW had hogged the top spot for 11 years.
Zetsche’s latest plan is to bring forward a slate of new electric cars, and with that and the latest sales figures, Mercedes looks likely to hold the number one spot until his contract expires in 2019.
Mercedes deliveries rose 12% in the first 11 months of 2016, more than double BMW’s growth. Mercedes sold 1.9 million vehicles in the period, nearly 70,000 cars ahead of BMW.
Zetsche is known around the Merc machine as Dr Z — due to his academic background — and, for whatever reason, he was no slouch at trading on his new personal image as he pushed the Daimler flagship brand to recover lost ground.
The Face of Merc
The standard, dowdy German chief exec look went out the window, and apart from the wardrobe transformation, Zetsche deliberately used his thick accent, witty and sharp sense of humour and trademark handlebar moustache to go online on social media and feature in company adverts, making himself the brand, or at least the face of the brand. And it worked, aided by some ball-dropping among the rival teams.
BMW’s i3 all-electric car didn’t gain much traction, nor did the distinctly unsporty minivan, the Grand Tourer, while its designs hardly changed in the latest revamps. Much the same could be said of Audi, with both firms revamping old products with design tweaks rather than launching anything really new
Daimler, on the other hand, has a whole bunch of new, from the electric car stable to an expanded range of SUVs, and a headstart in design and production which the others can’t catch up. In the e-car segment, it plans to push deliveries as high as 25% of all sales, which in turn means both cracking the conundrum of range — to crank it up beyond the 450 km mark — and facing down competition from the likes of Tesla.
So apart from the makeover, what has been the secret of Zetsche’s success? One prong of his approach has been a heavy emphasis on innovation, now paying off, and the other was a ferocious concentration on keeping down development costs. That was important, because without tight control there was a huge danger of these costs ballooning out of control in the face of the industry’s move toward autonomous driving and ride-sharing, and increased regulatory pressure to reduce emissions.
But Dr Z will retire in 2019, so what then? Will the ability to wear slick casuals be a prerequisite for getting the job? Company insiders say that the man now being groomed for the job is a veteran of the company, Ola Kaellenius. He is head of research and development and chief of sales at Mercedes-Benz Cars, he is 47 years old, and he’s a Swede.
Maybe Kaellenius will prefer to wear the old dark grey suit, but equally, maybe being the first non-German ever to head the firm will compensate for any personal style errors on his part. In any event, he will be following a tough act and will have to look to boosting profitability, while at the same time walking the tightrope of balancing huge investment in new technology with pouring out updated models and new designs.