It's Not Primarily About Becoming Number One

2023 Author: Eric Donovan | [email protected]. Last modified: 2023-11-27 05:39

Mercedes achieved a new sales record last year. But in a direct comparison, the Stuttgart-based company is behind BMW and Audi. In an interview with Autogazette, Sales Director Joachim Schmidt talks about how the distance to the competition can be shortened.

Following the appointment of Hubertus Troska as China Board member and the bundling of its sales structures, the Daimler Group expects sales on the Chinese market to increase as early as the middle of the year.

As Mercedes sales manager Joachim Schmidt said in an interview with Autogazette, something like this won't happen overnight. “But I still hope for more stringent market cultivation in the course of this year. As a result of the personnel and institutional reorganization, I assume that we will also be able to achieve quantitative effects from the middle of this year,”said Schmidt.

We want to sell 300,000 cars in China by 2015

In the previous year, Mercedes was able to sell 196,211 vehicles in China, which was a modest increase of 1.5 percent compared to the competition. Despite this smaller increase, Schmidt is sticking to his sales target for 2015: "Our goal is: We want to sell 300,000 cars in China by 2015." The competitor Audi was able to sell a little more than 400,000 units in China last year and thus achieve an increase of almost 30 percent.

What counts for us is that our customers are satisfied

Autogazette: Mr. Schmidt, how much does it hurt you to have only finished third behind BMW and Audi this year?

Joachim Schmidt: Why third winner? We became winners because we sold more cars than ever before. With the core brand Mercedes-Benz there were 1.32 million vehicles, with Mercedes-Benz Cars 1.42 million.

Autogazette: In a comparison of the three premium manufacturers, you are only in third place behind Audi in terms of sales figures.

Schmidt:This placement is not so important for our customers. And what counts for us is that our customers are satisfied with our cars. And that's it, as customer satisfaction studies by JD Power or the ADAC's AutoMarxX show, for example. We are the best here. Of course, our competitors' colleagues sold a few more cars compared to us, but our performance is good.

Want to satisfy our shareholders

Autogazette: Mercedes has set itself the goal of becoming the most successful premium manufacturer ahead of BMW and Audi by 2020 at the latest. Are demands and reality currently somewhat different in Stuttgart?

Schmidt: By 2020 we will bring a total of 13 new vehicles onto the market in segments in which we are not or only partially represented today and in which there are growth opportunities for us. By filling these niches and doing business in China, we can become number one. But it is not primarily about becoming number one, but rather that we grow profitably.

Autogazette:A brand like Mercedes must of course set itself the goal of being number one. But with a view to BMW's lead with now 1.84 million, is it ultimately not just a matter of who will be number two behind the Munich team?

Schmidt: Let's see. But if you take a look at the BMW numbers without the Mini, then the gap becomes smaller.

Autogazette: The 1.42 million of them also contain over 100,000 Smarts …

Schmidt: … without Smart, our core brand Mercedes-Benz has 1.32 million. For us, this race for number one does not have the importance that the media attach to the issue. We want to satisfy our shareholders, we want to grow profitably and satisfy our customers as well as our employees.

S-Class is the greatest good for us

Autogazette: Is the Chinese market currently giving you sleepless nights due to the disappointing sales figures compared to the competition?

Schmidt: (laughs) I can sleep very well. China is not giving me any sleepless nights, but it is without question a challenge because we are not yet optimally positioned there. We have analyzed the reasons and will now work through them one by one. With a view to China, however, it should also be mentioned that we are number one in the luxury segment, the crown of automotive engineering, with the S-Class in the year before its model change with over 30,000 units sold.

Autogazette: What growth impulses do you expect from the new S-Class for the Chinese market?

Schmidt: The S-Class is our greatest asset for building the image and making our brand profitable. We will be launching the new S-Class in Europe this summer, with the USA and Germany being the most important markets for this model alongside China.

Our goal is set

Autogazette: You were able to sell 196,200 cars in China in the previous year, which corresponds to an increase of just 1.5 percent. Do you have to give up your goal of selling 300,000 cars in China by 2015?

Schmidt: Not at all. Our goal is: by 2015 we want to sell 300,000 cars in China. We're not

doing that badly in China either … Autogazette: … well: Audi, with over 400,000 units sold there, was up by almost 30 percent …

Schmidt: … and we sold more cars there than ever before in the previous year.

Autogazette:With Hubertus Troska, Daimler has just appointed a new board member for China and has bundled its sales activities under one roof. How long does it take for that to show up in sales?

Schmidt: Something like that won't happen overnight. But I hope for more stringent market development in the course of this year. As a result of the personnel and institutional reorganization, I assume that we will also be able to achieve quantitative effects from the middle of this year.

Are in the process of closing gaps in the model range

Autogazette: You said that you analyzed the reasons for the lower sales compared to the competition. What are the reasons besides the gaps in the model range?

Schmidt: It should be noted that we cannot offer our customers a car comparable to an Audi Q3, for example. However, we are in the process of closing these gaps in the model range. There was also the problem of the sales structure, which we have now resolved by bundling sales activities.

Autogazette: Does it really cost a lot in terms of sales if you don't have a car comparable to the Q3?

Schmidt:If you don't have a small off-road vehicle in your portfolio, you can't offer it. And there are customers who just want a vehicle and not a large SUV. If you are not represented in such segments, you cannot serve these customers.

CLA will further promote our growth

Autogazette: With a view to the MB 2020 growth strategy, is China by far the most important market for you or does one not have to look at the USA at the moment?

Schmidt: If you look at the forecasts, China will be the largest car market in the world. But we also have great opportunities in the USA. We are excellently positioned there and with the CLA have now presented a model that will further promote our growth.

Autogazette: In the USA you were able to achieve an increase of 11.3 percent with over 274,000 cars in the previous year. Do you expect double-digit growth this year?

Schmidt:We want to grow faster than the market in the USA. However, the CLA will not be available on the US market until September and will therefore not play a major role in terms of the number of units in 2013.

Autogazette: What are your expectations for Europe this year? Will the crisis continue unchanged this year?

Schmidt: We are currently assuming that Southern Europe will stagnate at the current low level. I don't think it will get any worse, but it won't get any better either: we have reached the bottom in Europe.

Autogazette: You want to increase sales again this year, despite the ongoing crisis. What are your expectations for this year?

Schmidt:I think that we cannot go any further with the Smart in the late life cycle. But I think we can get back to 100,000 units. We want to continue growing with Mercedes. But I will not comment on the exact percentage.

Autogazette: In the middle of 2012 you said that the core brand Mercedes-Benz will achieve its target of 1.5 million cars by 2014 as early as 2014. Are you sticking to this statement despite the crisis?

Schmidt: Yes, nothing has changed in this statement: We will achieve the goal of 1.5 million units as early as 2014 with our core brand Mercedes-Benz.

Electromobility will remain a niche

Autogazette: The hype about electromobility has subsided. Do you notice this in the dwindling demand for the electric smart?

Schmidt: Electromobility has been subject to a strong upward and downward movement, but nothing has changed for us in our view: Electromobility will remain a niche for urban mobility for a long time. With our Smart, we have an ideal vehicle for the requirements of electromobility. The Smart Electric Drive is the only series-produced electric vehicle in the world that is attracting demand. We currently have such a high demand for cars in Europe that we can hardly meet them.

Frank Mertens conducted the interview with Joachim Schmidt