“We will drive our operating margin so far that we will be leading the premium market.” Those are the words of DaimlerChrysler CEO, Dieter Zetsche, in an interview with German car magazine Auto Motor und Sport two weeks ago. Now analysts are saying it could happen as soon as this year.
BMW passed Mercedes in the global sales category in 2005, and has held the lead as Germany’s premium auto maker ever since. But now some industry analysts are saying that even though BMW was ahead of Mercedes in the first four months of 2007, the Daimler AG owned company could take the lead from BMW with in the next year or two.
With Chrysler out the way Daimler has more time to concentrate on the Mercedes. The company is now aiming to raise profitability to its premium car group to the head of its class. According to Morgan Stanley analyst Adam Jonas, BMW will sell 1.236 million vehicles in 2007, compared with 1.165 million vehicles for Mercedes. “So Mercedes isn’t going to take the title this year, we don’t believe,” Jonas told Automotive News. “But next year it will have a lot better chance.”
Another analyst predicts that Mercedes could pass BMW as soon as this year, if the launch of the 2008 Mercedes C-Class goes well in the US. He also says that now Daimler can invest more in product innovation and product investment with Chrysler out of the way. “No longer being chained to Chrysler is considered a great liberation, and the organization can concentrate so much more on the development of superior cars.”
In the first quarter of 2007, Mercedes’ profitability amounted to 6.6 percent while BMW reported a 7.6 percent increase. Zetsche hopes to boost revenue at the future Daimler by 5-6 percent per year.
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