Automotive News Europe - September 2011 - 24

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DIETER ZESTSCHE

AUTOMOTIVE NEWS EUROPE

COVER STORY

DR. Z’S ATTACK PLAN
Daimler CEO determined to push Mercedes back to No. 1 among premium automakers

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year before Dieter Zetsche took over as Daimler CEO, the company’s Mercedes-Benz brand lost its place as the world’s top-selling premium automaker to BMW. Zetsche wants the title back. The 35-year Daimler veteran talked about how he is going to help Mercedes return to No. 1 when he met with Automotive News Europe Editor-in-Chief Harald Hamprecht at Daimler’s headquarters in Stuttgart.
In a letter to your employees, you announced that you wanted to become No. 1 in the premium segment again. What is your plan of attack?

When do you plan to be No. 1 and what figure are you targeting?

Our goal is to be No. 1 in profitability and sales in the premium segment. The objective is clear, and so is our commitment. Concrete measures are next. We will talk more precisely about our milestones later.
How are your profitability goals shaping up?

MEET THE BOSS

In recent years, we have already created the basic conditions for sustained success. We again have top quality and a clear, appealing design. We have expanded our traditional strengths, including safety. We are reducing our CO2 emissions more quickly than our direct competition and we are improving our customer relationships more vigorously than ever before. And this is all related to improvements in efficiency.
And looking forward?

Even before the economic crisis of 2008, we set a profit margin of 10 percent as our goal at Mercedes-Benz Cars, as part of our “Go for 10” program. This still applies. We reached this level for the first half of the year. And we don’t have to hide from that. If greater potential in the industry should emerge, we will develop it.
What is your short-term sales goal?

Dieter Zetsche, 58, has been Daimler AG CEO and head of the Mercedes-Benz Cars division since 2006. The German, who was born in Istanbul, Turkey, joined the company in 1976 as part of the research division. He has held key posts in just about every Daimler division including sales, engineering and commercial vehicles. Before being promoted to the company’s top job, Zetsche was CEO of Chrysler Group, where he gained the nickname “Dr. Z” following a successful ad campaign. Less than a year after leaving the U.S. automaker’s Auburn Hills, Michigan, headquarters, Zetsche was part of the team that sold Chrysler to private equity firm Cerberus, a move that quickly got Daimler back on track financially. He has a doctorate in engineering from the University of Paderborn, Germany.

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This year, we expect sales of more than 1.35 million for Mercedes Benz Cars.
How many units does Smart account for?

Last year, the figure was 97,500 Smarts. In 2011, we are aiming for 100,000.
For the entire year, that means you could still stay ahead of Audi, which targets sales of more than 1.2 million.

We will introduce a wide variety of additions to our product portfolio. We also will have a greater presence in various markets and grow faster than the competition with this overall positioning. So we are moving into the lead in sales and are no longer ahead just in brand value.
What about in profitability?

We are striving for a considerable increase in volumes. That’s why we have made investments in the Kecskemet (Hungary) plant, in addition to our compact-class factory in Rastatt (Germany). The Kecskemet facility will have a capacity of 100,000 vehicles a year. In the past, we sold 270,000 A- and Bclass units at our peak. Time will tell where we will be with the full availability of all our models.
You have 23 car body variations, compared with 21 at Audi and 19 at BMW.

That is naturally part of it. But due to the particular cycle, you don’t end up at the same level each quarter and year.
BMW had a profit margin of 13.3 percent in the first half, Audi 11.8 percent and you 10.0 percent.

In recent years, we invariably sold fewer vehicles than Audi in the first four months of the year. This year, this was the case for six months. But we were still ahead for all of 2010. It is certainly a bit tighter this year. But I am confident.
Will you add staff?

As a whole, we coincide in many areas. Today the biggest difference between us and Audi is that we have no representation in the A1 segment.
Audi intends to hit 120,000 units a year in the segment.

In 2011 and 2012, many of our products are in the last third of their life cycles. The situation is just the reverse at BMW. That’s why it is a snapshot. But I am convinced we can lead right through the cycle in profitability compared with our two competitors.

At the end of 2010, Daimler had 260,000 employees worldwide. The figure was 164,000 in Germany. This year, we will make more than 10,000 new hires globally, 4,000 of them in Germany. In the future, it’s clear that we will predominantly see growth in the growth markets.
In the compact segment, you want to expand the A- and B-class family to five models. Do you still want to double volumes there?

That also explains the volume difference compared with our portfolio. The situation is similar at BMW with its X1.
You will launch an X1 competitor. Will you also launch an A1 rival?

If you only focus on sales figures, it is an interesting segment. If you look at profit margins, it is significantly less attractive. So

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