Radek Jelinek
President and Director General
Mercedes-Benz México
/
View from the Top

New Ventures and Future Strategies

Fri, 09/01/2017 - 14:16

Q: What strategies are you implementing in Mexico to retain Mercedes-Benz’s global position as the leading brand in the premium segment?

A: We moved from third place in the premium market to pole position among premium carmakers by closing the sales gap with our competitors, year after year. Having closed 2016 as the number one premium brand globally, we have mimicked that in Mexico in the first two months of 2017. Our battle with Audi and BMW in Mexico is interesting because it is a close race in total sales numbers. This encourages us to find better and new ways to stand out in the market and we strive to be the number one brand by the end of the year. We achieved 34.4 percent growth by the end of 2016 in Mexico, which is almost twice BMW’s increase and over four times what Audi grew. We expect to achieve double-digit growth once more in 2017.

Despite uncertainty and challenges related to exchange rate volatility, we expect the premium segment to remain strong in 2017. Our peers have more conservative goals for the year but I think during uncertain times people tend to buy more. Additionally, Mexican automotive prices are more attractive than other markets.

Q: Which flagship models led Mercedes-Benz toward its 34.4 percent growth?

A: The first model that changed the market’s dynamic was the SLS AMG with its sporty design and gull-wing doors. Posterior A-Class models and other families started using the same design language, combining sportiness with elegance. Mercedes-Benz has transformed its image to appeal to a younger generation, which has made us even more approachable to new clients.

Our models have been welcomed with open arms by the local market. We do not hold extensive inventories so our main problem is vehicle availability. J.D. Power awarded us top marks in its Customer Service Index, ranking Mercedes-Benz as the top premium brand surveyed. Traditionally, our bestselling model in Mexico is the C-Class, followed by the CLA family. But the SUV segment showed the most growth, with increases of over 45 percent. The launch of the new E-Class was also a success in Mexico and we are now planning the release of the cabriolet and coupé versions.

Mercedes-Benz expects success in the SUV segment in 2017, as well as for our C and CLA models. We are also launching a facelift for the GLA and limited editions such as the AMG 43 GLE Coupé. We will have a new surprise each month and expect 2017 to be as interesting as 2016.

Q: How likely is it that Mercedes-Benz will bring the new Maybach G 650 Landaulet to Mexico?

A: We have already registered interest in this vehicle. Only 99 units of this limited edition will be available around the world and it will cost approximately MX$20 million (US$1.1 million). There are many collectors in Mexico and the new Landaulet, the 300 units of the S 650 Maybach cabriolet and all our other collector’s editions are part of our strategy to merge new technology with Mercedes-Benz’s mysticism and legend. Economically, these models generate small returns but they keep clients captivated by the brand.

Q: Why did Mercedes-Benz choose to enter the pickup market?

A: Our more than 35 models allow us to compete in most market segments but we continuously analyze the areas in which we do not yet participate and try to adapt our philosophy to them. We will not offer a standard pickup but a top-of-the-line, luxury model. There is a niche we can enter with this model, planned for release in Mexico and North America in 2018. Diversification and evolution is paramount to brands’ survival and globally, our only competitor in this segment will be Volkswagen with its Amarok model.

Q: How important is the hybrid market for Mercedes-Benz’s international strategy?

A: It is one of our main priorities and we could even classify it as a life-or-death factor for Mercedes-Benz. Demand is growing as clients become more aware of their impact on the environment and hybrids are our route to meet stricter emissions regulations. Electric mobility is the future and we consider plug-in hybrid vehicles as the best stepping-stone for the Mexican market because of its flexibility. There are many changes on the way, one being the creation of a new brand for all our hybrid and electric models. We presented the EQ concept at the Paris Auto Show, a new brand under the Mercedes-Benz name that will allow us to showcase these vehicles without losing the brand’s traditional appeal.

We plan to introduce four new hybrid models to the country, two of which, the GLE and S-Class, will arrive in 2017. The GLC and the C-Class will reach the market in 2018. In addition, we are launching a fully electric Smart that will debut in 2017. This model is perfect for the city and a safe bet in the electric market thanks to its small size.

Hybrid technology is also part of our AMG line and we just presented a new GT concept at the Geneva Auto Show. This will be the third vehicle fully designed by AMG, following the SLS and the original GT. AMG will celebrate its 50th anniversary in 2017 and we will release two limited editions: 500 GT C vehicles and 300 GT R models.

Q: How is Mercedes-Benz innovating in connectivity and mobility technology?

A: Daimler just announced the creation of a new company called CASE, meaning Connected, Autonomous, Sharing, Electric. It will resemble a startup but will collaborate closely with Mercedes-Benz, allowing us to compete with all the new technology development companies and data applications. These innovations present a challenge for Mercedes-Benz, the oldest automaker in the market. In response, the board decided to change the company’s mindset in 2015, making our innovation process much more agile. Technology development will still include areas like safety and driving performance but we will complement it with updates matching global trends. Collaboration with research centers and academia will be imperative and Daimler already has a center in Silicon Valley working closely with some of the startups in the region.

Q: What is your view on mergers between automakers to facilitate technology development processes?

A: Cooperation has been present for many years in the industry, mainly focused on reducing costs through economies of scale. Particularly when managing volume, collaboration between companies is a powerful tool to reduce production costs for certain components. We have many agreements with Nissan for part development although we have always made sure to keep the actual design of the vehicles separate. Autonomy is important and it is part of Mercedes-Benz’s identity, whether concerning quality or image branding.

Q: What are Mercedes-Benz’s expectations for its Formula 1 participation following Nico Rosberg’s departure and Valtteri Bottas’ appointment as the new team member?

A: Few people know Formula 1 has featured hybrid technology for the last three years. The hybrid engines are state-of-theart, delivering 800hp with six cylinders and 1.6L capacity. Ten years ago, this was inconceivable but this year, we expect our car to be 3 or 4s faster than in 2016 thanks to aerodynamic adjustments. Everything is changing for Mercedes-Benz in Formula 1 and even though we are still favorites, there could be surprises for our fans.

I have high expectations for Valtteri Bottas; he will be a great partner for Lewis Hamilton. The championship is important for this year’s strategy and we will invest heavily to make the Mexican Grand Prix the party of the year once again.

Maybach G 650 Landaulet