"The New York Times April 28, 2005

DaimlerChrysler Earnings Sink

* By THE ASSOCIATED PRESS *

FRANKFURT, Germany (AP) -- German-American carmaker DaimlerChrysler AG said Thursday its first-quarter earnings plummeted by 30 percent, dragged down by losses at luxury unit Mercedes.....

First-quarter net profit at the world's fifth-largest automaker fell to
288 million euros ($374 million), or 28 euro cents (31 cents) share,
from 412 million euros, or 41 euro cents a share, in the same period a
year-ago. Quarterly sales for the company as a whole were down 2 percent
to 31.74 billion euros ($41.16 billion) compared with 32.35 billion
euros in the same period last year....

But Mercedes-Benz remained vexing for the automaker as it struggled with
continued quality problems...Unit sales of Mercedes-Benz brand were 7 percent lower than the year before, with 247,000 vehicles sold. In March, the company recalled some 1.3 million Mercedes-Benz cars worldwide to fix problems with their alternators and batteries, the largest recall in its history.....

On Monday, Nissan Motor Co. reported a 17 percent increase in profit and strong sales, while last week, General Motors Corp. posted a bruising $1.1 billion loss. Ford Motor Co. posted a $1.2 billion profit, but cut its earnings outlook..."

This is from the New York Times web site (www.nyt.com) today. The emphasis was done by me. I've edited out a lot, none of it good news for Daimler-Chrysler, IMHO.

 

Chrysler is doing the Mercedes in.


{Bzzzt}
Friend: " what was that?"
Mercedes Owner: "just my electrical frying again"

-T

 

I think Chrysler is doing well at this point, arent' they? Posted their first profit in ages during Q4.
Merc is spending too much on labor in Germany. At the same time, the poor electronics have been killing them post sale.

They'll be back, just need to iron out the same issues that seem to be messing with all German companies at the moment.

 

It seems that their suppliers are hurting the German marques at this point something awful.

 

Meh, all I know is that my E55 AMG looks lovely sitting next to the G35.

 

Mercedes (along with BMW and Audi) are just way too expensive for what you get. When shopping for cars before buying my G, I looked at the C320, A4 and the 330. Once you option them out with what's standard on the G35 and TL, they're over $40k. And they don't have the performance (except for the BMW) to justify the extra money. All you're paying for is the status.

Until they can cut their costs to complete with Lexus, Infiniti, and Acura, they'll continue to hurt.

 

They don't need to cut cost, but offer more for the money. The Euro/USD isn't helping here either. Cutting cost would only multiply the monetary issues. We already know the Europeans don't do the economy car market very well. They should continue exercising in this market, but offer bigger engines and more power and features. They need a kick-*** V6 or a really small liter V8 (4.0).

 

they are their own worst enemy... 4 major things wrong

1. Built quality dropping
2. Too much product competing with itself which muddies the water confusing for consumers
3. Mercedes was built around wealthy, liquid people. They do not offer finance offers like Japanese luxury companies can. American consumers dont pay cash like they used to.
4. Poor job of retaining existing customers. Back in the day it was considered a privledge to own a Benz and there marketing and service was geared that way. There was less competition so they could be eliteist. Times are a changin, Mercedes didn't.

 

I think there is something else at work here.

Last month's Car and Driver had a Sports-Luxury car shoot out that reflects what is hurting the Germans more than anything. They are losing market share to the Japanese. The final rankings were:

#1 Infiniti M45
#2 Acura RL
#3 Lexus GS430
#4 Mercedes E350
#5 Audi A6
#6 BMW 530i
#7 Cadillac STS
#8 Jaguar S-Type

It is becoming common for Infiniti/Lexus/Acura to beat the Germans in tests that they dominated just a few years ago. Considering that now the top three rated cars are not German and are priced in many cases lower than the German cars no wonder why Mercedes is hurting.

 

So it is the G and now the M!

 

Its far from the G35 sinking Mercedes and that is laughable. ITs mercedes sinking mercedes as well as newer competiton. Mercedes still sold over 1 million units globablly last year, with BMW almost beating them. Audi sold 700,000 units then Lexus with over 300,000 globably last year. Outside of Caddy, no one else is even close.

The constant recalls are killing any profit, as they have to go back and fix thousands of cars for free.

 

How can a company be profitable when they build 60 different models? Between all of the engines and trim levels there is SOOO much that can go wrong. Look at lexus, they have 9 models, all with textbook reliability. Mercedes has over 30. Build a few things really well instead of many things that are mediocre and they will be the market leader they could be.

 

Umm - lexus is really a toyota operation and they have about 30 models too right. o Product differentiation off a few platforms is the way to make $.

 

Bang for the buck you can't beat Infiniti. From owning an Audi S4 and a G35 I can tell you the build quality just doesn't compare to the Audi. Infiniti is decent but you can't beat Audi's fit and finsih the car is much tighter feeling no rattles or cheap plastic. I think that's where the price difference comes in.

 

One of the biggest problems the German manufactures are facing is they are getting killed in the SUV market and are not in the pick up truck market at all. SUV/Trucks are a huge profit and sales driver for the American and Japanese manufactures.