Automotive Industry Daimler’s Intelligent Sedan

The German automaker is unveiling its new E-class vehicles in Detroit along with its new hybrid strategy.

Two days before America’s largest auto show in Detroit, Daimler’s head of sales Ola Källenius visited  California’s Silicon Valley.

“It was a perfectly normal exchange of ideas between Silicon Valley and Neckar Valley,” said Mr. Källenius, referring to the U.S. hotbed of technology and a German counterpart, the Stuttgart region.

Mr. Källenius, 46, is a member of the German automaker’s management board and also responsible for Mercedes-Benz’s marketing. He has been working for Daimler since he was 24, and he has experienced both good times and bad. As such, he represents the transition the firm has been experiencing the past few years. The visit to America's West Coast was part of his strategy to embrace the new.

Low fuel consumption is the top goal. Until the VW “Dieselgate” scandal, many people considered the diesel engine to be the cure-all. Now, diesel-powered vehicles have taken a huge hit in the public’s perception.

Digitalization, self-driving cars and alternative power sources are buzzwords in the automotive industry. In recent years, Daimler has aimed to orientate its core brand, Mercedes, to a younger demographic.

That’s why the Stuttgart-based corporation is increasingly choosing the United States to present the firm’s important new products. Two years ago, it was the new version of the bestselling C Class. This time, it’s the larger E Class that takes center stage. The Daimler people are calling it “the most intelligent business sedan in the world.”

Mercedes sold 343,000 cars last year in the U.S., 3.8 percent more than the previous year. The whole market, however, grew about 2 percent stronger.

Many Americans embrace large-sized vehicles, SUVs and pickup trucks in times of cheap gas prices. Mercedes, like all the other German carmakers, has been limping behind in growth figures since none of them offer large capacity vehicles with strong engines at manageable prices there. Now, the new version of the E Class, a model with traditionally large profit margins, can help change that.

Mr. Källenius wants to achieve more. The image of the respectable Mercedes owner driving an old fashioned car is supposed to be buried with the new E-class cars. Moreover, the U.S. is assumed to be the appropriate platform to boost the group’s hybrid models.

Currently, the number of vehicles sold worldwide with a combination of combustion and electric motors is in the single-digit range. Thanks to generous government support, exceptions such as Norway and the Netherlands show percentages in the double-digit range.

That’s also the long-term goal worldwide.

“The subject will have a greater significance in 2020,” Mr. Källenius said.

Last year, Daimler introduced four hybrid models, and by 2017 it aims for 10. To achieve this, every four months, on average, a new model is planned to be brought on the market.

Regulations governing pollutant emissions are becoming stricter globally. Particularly in urban areas, it’s evident that in a few years only hybrid-powered or all-electric vehicles will be allowed. In this respect, Daimler’s strategy is in step with anticipated changes in regulations.

But the percentage of big SUVs is climbing around the globe. Mr. Källenius says Daimler has a strategy for the future.

Low fuel consumption is the top goal. Until the VW “Dieselgate” scandal, many people considered the diesel engine to be the cure-all. Now, diesel-powered vehicles have taken a huge hit in the public’s perception.

The automotive industry, however, says such power systems will still be needed in the coming years, if simply to meet the strict guidelines on carbon dioxide emissions for their respective overall fleets; however, the percentage will drop in the long term.

Dieter Zetsche, of Daimler’s board of directors and head of Mercedes-Benz, sees the tensions between regulators, who want low-emission cars, and customers, who want horsepower, to be less of a problem than they used to be.

“Just a decade ago, SUVs were insane clinkers that were driven around the place,” he said, comparing today’s sporty off-road vehicles with those of former times.

Such vehicles used to consume five to six more liters of gasoline per hundred kilometers than a comparable sedan, he noted, and today the difference is only half a liter.


Christian Schnell is an editor with Handelsblatt covering the stock market and German auto industry. To contact the author: [email protected]