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Zetsche’s 10 years at Mercedes-Benz

Dieter Zetsche with new E-Class car at 2016 Detroit Auto Show

– by He Lun, CBU/CAR Guest Columnist

Dieter Zetsche, head of Mercedes-Benz Cars, said six years ago at the Detroit Auto Show that the company’s goal in China was to pass BMW in the short term and close in on Audi in the long run. He was responding to my question about competition in China at the company’s press conference.

Unfortunately in two years, Mercedes-Benz was first passed by Audi globally and then left farther behind BMW in China. From then on, all senior Mercedes-Benz executives shunned away from questions about catching up opponents in China.

Today Mercedes-Benz has passed Audi and is closing in on BMW globally. Moreover, it achieved a 35 percent growth in China while Audi sales were decreased and BMW sales stagnant.

When the same question was raised about competition in China earlier in Detroit where the German carmaker launched its ninth generation of the E-Class sedan, Zetsche’s answer this time was much more cautious: “We are focusing on maintaining a steady growth, instead of aiming to beat competitors by certain margin…. What we have achieved today is not something worth bragging about, as it is the natural outcome of our hard work. What is important is that we should keep our faith when we are in difficult situations and keep a cool head at good time.”

Zetsche means what he said as he has experienced it all. Zetsche was appointed to revive the company 10 years ago when Mercedes-Benz just lost its lead in luxury car sales and its cooperation with Chrysler was a total mess. The company continued its slide in sales and was passed by Audi in 2011. It was only after 2014, with its new generation of vehicles that Mercedes-Benz finally started to bounce back.

What did Zetsche do to turn the company around? His answer to Chinese reporters was frank: “I cannot say we have done everything right, but we have at least done the basic things right, such as manufacturing quality, design, fuel economy, comfortability, dealer network and brand image building. In addition, we have expanded our vehicle lineup.”

The quality improvement is worth highlighting in particular. Mercedes-Benz lost its high-quality reputation 10 years ago and was frequently ranked bottom in professional reviews along with Chrysler. Recently, Mercedes-Benz has finally turned things around and crawled back to the top group of cars again at various reviews.

Another highlight is design. Two years ago, German magazine AMS reported that Mercedes-Benz was in par with BMW and Audi on technologies, emissions controls and so forth, but lagged far behind in design. Today, Mercedes-Benz’s stylish E-Class design has been well received by the market. Gorden Wagener, the head of design department since 2008, contributed greatly to the success.

Zetsche also mentioned the key to have the right people and an efficient team. Mercedes-Benz China has an excellent troika team of sales president Nicholas Speeks, senior executive vice president Li Hongpeng and executive vice president Duan Jianjun. The troika has been operating with full freedom under the direction of Daimler AG China CEO Hubertus Troska. Without them, it is impossible for Mercedes-Benz China to recover from the 2012 crisis and perform as well as it does today.

Of course, the most important “right person” may be Zetsche himself. In recognition of his achievements, his contract has been extended to 2019. The 61-year-old Zetsche again was cautious when talking about the future: “We are making great progress towards our business goals. But we do not think we are fully prepared for what is to come in 10 years yet. The powertrain development and Industry 4.0 concept will be very important in the next couple of decades…. We have been advancing on the smart driving technology during the last few years and introduced one vehicle every year. In my opinion, fully autonomous vehicles may be ready for the market in the next decade around 2020.”

To the Chinese media, Zetsche is known for his simple, straight forward, kind and pointed comments during interviews. He is the leading multinational OEM executive that makes sure to meet with the Chinese media two to three times a year. This is in sharp contrast to former Volkswagen chairman Martin Winterkorn who severed his relationship with the Chinese media as far back as in 2010.

(Translated by Kevin Wang based on author’s article originally published on the Zhongshang Auto)

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