{"id":221330,"date":"2022-03-16T14:15:59","date_gmt":"2022-03-16T18:15:59","guid":{"rendered":"https:\/\/www.thedetroitbureau.com\/?p=221330"},"modified":"2022-03-16T16:44:27","modified_gmt":"2022-03-16T20:44:27","slug":"crisis-du-jour-automakers-facing-more-than-one-curveball-says-mercedes-chief","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2022\/03\/crisis-du-jour-automakers-facing-more-than-one-curveball-says-mercedes-chief\/","title":{"rendered":"Crisis du Jour: Automakers Facing \u201cMore Than One Curveball,\u201d Says Mercedes Chief"},"content":{"rendered":"\n

It\u2019s a tough time to be running a car company, the industry facing semiconductor shortages, a war in Ukraine driving up fuel prices and threatening to lead to additional shortages of key raw materials. Add to that the need to steer in a new direction as the industry ramps up its migration from internal combustion engines to battery-electric vehicles.<\/p>\n\n\n\n

\"Mercedes
Mercedes CEO Ola K\u00e4llenius said its a tough time to be an automaker these days.<\/figcaption><\/figure><\/div>\n\n\n\n

Mercedes-Benz, in particular is dealing with \u201cmore than one curveball,\u201d said Chairman Ola K\u00e4llenius, during a media roundtable on Tuesday. But the automaker\u2019s recent financial results suggest it is navigating its way through the various crises, he stressed.<\/p>\n\n\n\n

K\u00e4llenius spoke to reporters in Tuscaloosa, Alabama at the SUV manufacturing complex Mercedes first opened in 1997. It has invested $7 billion in the operation since then, including $1 billion spent to add a new battery pack production facility and to modify the assembly plant to handle battery-electric vehicles<\/a><\/span><\/strong>. It will begin producing the new EQS SUV by mid-year, with the smaller EQE SUV to follow.<\/p>\n\n\n\n

Short time, but many changes<\/h2>\n\n\n\n

In the three years since the Swedish-born executive took over as the automaker\u2019s first non-German chairman and CEO, K\u00e4llenius has shaken things up in a variety of ways. There\u2019s the name change, dropping Daimler AG in favor of what most of the world would recognize it as, Mercedes-Benz. As 2021 came to an end, the Daimler Truck unit was split off.<\/p>\n\n\n\n

And in a marked departure from the strategy of Dieter Zetsche, his immediate successor, K\u00e4llenius has reversed the strategy of steadily adding more models to the line-up \u2014 resulting in an alphabet soup of products like the CLA, MLE and EQS.<\/p>\n\n\n\n

\"K\u00e4llenius
K\u00e4llenius told reporters he believes the company is taking the right steps to be successful in the long run.<\/figcaption><\/figure><\/div>\n\n\n\n

Even more significant, however, was the decision to target sales leadership in the global luxury vehicle market.<\/p>\n\n\n\n

\u201cWe\u2019re not chasing volume. We\u2019re chasing value,\u201d K\u00e4llenius explained. \u201cWe\u2019re not incentivizing ourselves into higher market share.\u201d<\/p>\n\n\n\n

That strategy appears to have paid off, at least based on the automaker\u2019s latest earnings which showed margins reaching 15% during the final quarter of the year.<\/p>\n\n\n\n

A constantly shifting market<\/h2>\n\n\n\n

Whether that will hold is uncertain, K\u00e4llenius acknowledged. There are so many uncertainties facing the industry right now that one needs to be cautious drawing conclusions about the future.<\/p>\n\n\n\n

In an unusual turnabout, what had long been a buyer\u2019s market has turned one favoring sellers \u2014 the automakers. Vehicle demand is strong but the chip shortage has made it difficult to keep factories running steadily.<\/p>\n\n\n\n

\"Mercedes
K\u00e4llenius with an assortment of new and upcoming EVs and PHEVs.<\/figcaption><\/figure><\/div>\n\n\n\n

And there are plenty of headwinds that could challenge plans for the future. The Russian invasion has cut off supplies of neon from Ukraine<\/a><\/span><\/strong>, one of the world\u2019s largest suppliers. That inert gas is essential for manufacturing semiconductors, meaning that shortage could get worse.<\/p>\n\n\n\n

That would be particularly problematic for Mercedes as it moves to transition from a traditional automotive manufacturer into one putting more and more of a focus on technology.<\/p>\n\n\n\n

\u201cWe are putting a stake in the ground,\u201d said K\u00e4llenius, adding, \u201cwe are going to decarbonize our business.\u201d<\/p>\n\n\n\n

The automaker had four BEVs in production at the end of 2021. It will end this year with nine and, longer-term, the goal is to eliminate the use of internal combustion engines entirely, though K\u00e4llenius is cautious about setting a specific target date. Regulatory moves, as well as market demands, will determine the final timeline, he said previously.<\/p>\n\n\n\n

More technology doesn’t just mean more EVs<\/h2>\n\n\n\n

Along with battery cars, Mercedes is putting a premium on in-vehicle technology. It made a splash with the Hyperscreen in the new EQS sedan. It\u2019s a completely digital display running pillar to pillar across the instrument panel.<\/p>\n\n\n\n

\"2023
Mercedes-Benz is developing an SUV version of the EQE as well.<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cWe\u2019re opening up a new profit pool,\u201d the CEO said during his Tuesday roundtable, with software and related services expected to yield 1 billion euros, or $1.1 billion at current exchange rates, by 2025.<\/p>\n\n\n\n

This could cover everything from streaming video that passengers could watch to technology like the Level 3 autonomous driving system set to launch this year in Germany<\/a><\/span><\/strong> on the Mercedes-Benz S-Class.<\/p>\n\n\n\n

The addition of over-the-air update technology on all future products will change the game for carmakers and car buyers alike, said K\u00e4llenius.<\/p>\n\n\n\n

\u201cWhen you bought a car in the past, that marked the peak of its technical capabilities,\u201d he explained. \u201cNow, you can add fresh software and keep adding more technology to the vehicle.\u201d<\/p>\n\n\n\n

So, even a previously owned Mercedes will be able to add features that can make it feel new again, K\u00e4llenius said \u2014 while providing the automaker a revenue stream long after the car was driven off the dealer lot.<\/p>\n","protected":false},"excerpt":{"rendered":"

The auto industry is experiencing tough times right now, and Mercedes-Benz CEO Ola K\u00e4llenius confirmed that, noting the company is dealing with “more than one curveball.” Find out more from TheDetroitBureau’s time with the executive.<\/p>\n","protected":false},"author":2,"featured_media":221339,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,8,5,1608,10,1164,2648,1347,9],"tags":[5305,5304,607,5306,5303,1690],"make":[],"post-state":[],"category_old":[],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/221330"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=221330"}],"version-history":[{"count":6,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/221330\/revisions"}],"predecessor-version":[{"id":221347,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/221330\/revisions\/221347"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/221339"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=221330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=221330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=221330"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=221330"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=221330"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=221330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}