Should Daimler AG Cut Cost for Mercedes-Benz?

Mercedes-Benz E55 AMG 2003

There has been much discussion in the news recently about Daimler’s decision to cut costs with Mercedes-Benz due recent financial quarters indicating that it is underperforming. They are planning to make redundancies within Mercedes-Benz and are implementing new cost cutting measures.

This cost cutting is of particular interest. In 1997, when Mercedes-Benz revealed the M-Class SUV, it was a ground-breaking product that pioneered the SUV segment. The M-Class SUV was a beautifully designed vehicle; however, its production quality was terrible. There were noticeable exterior and interior gaps between the parts, so much so that you could easily put your finger between them. Such gaps are always a clear indication of a poor quality automotive.

This poor quality was also seen in the E-Class and other models, except for the S-Class. The E-Class and SL-Class released in 2002 were generally just problem cars. They had serious issues with the SBC brake systems, parts were failing and, whilst I am not saying this for dramatic effect, I remember a moment when a brand new E-Class’s spare tyre compartment lever fell off as soon as the customer tried to open it; it was just a plastic lever. The E-Class also had serious electronic problems; the horn was activating windscreen wipers; signals were flashing the fog lights – the story goes on.

During those years, Daimler decided to cut costs and rely on their heritage to sell cars. It was effective however when a car’s brakes fail, it is not something you can easily recover from. As a result of the problems of E-Class, M-Class, SL-Class, C-Class and others, Daimler invested heavily to restructure their quality and improve customer confidence in the brand. This was a very expensive decision.

Unfortunately, Daimler is heading in the same direction again. With the implementation of new cost cutting measures, it is inevitable that we will witness more electronic problems in the upcoming Mercedes-Benz vehicles. Whilst I hope this won’t happen, today’s vehicles are heavily reliant on electronics. When you cut costs or cut corners with electronics, the consequences are catastrophic. Especially during this era where the automotive industry is highly competitive and there is less consumer demand for cars.

Daimler’s decision to cut costs to satisfy investors will not go well. Sooner or later, they will have to invest heavily again to recover the damage they have caused. However, this time, the damage will be broadcast across social media, having a truly emphatic negative impact on the brand name; much more so than in 2000 when social media was less influential.

We all hoped that Daimler would adopt a more conscious cost cutting measurement this time around, but it seems they may not have learnt their lesson.

Mercedes-Benz E55 AMG 2003

Mercedes-Benz E55 AMG 2003

Mercedes-Benz E55 AMG 2003

Mercedes-Benz E55 AMG 2003

Mercedes-Benz E55 AMG 2003

Mercedes-Benz E55 AMG 2003

Mercedes-Benz E55 AMG 2003

Photo Credit // Mercedes-Benz

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