Will Mercedes Ditch the Maybach?

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Originally Posted by Gail Edmondson

A report surfaced recently in the Cleveland Leader that disastrously weak sales have forced Mercedes to close down nearly half its Maybach showrooms in the US this year — 29 out of 71 — and compensate dealers for the $500,000 investment. The sales target in 2006 was 600 cars, but dealers sold only 146. Mercedes confirms the “consolidation” in dealerships but insists they were not “closed down” and that the move is merely aimed at improving profitability.

Since Mercedes threw down the gauntlet to Rolls Royce in 2003 with the launch of the $335,000 Maybach, it has sold only 800 cars — total. The Maybach was widely praised for its advanced engineering and technology, but suffers from a severe lack of brand cache. After all, $335,000 is a lot to pay for a super-luxury sedan that none of your neighbors recognize. By contrast, arch rival Rolls Royce sold 805 of its opulent Phantom sedan last year — and will sprint “well past 900” this year, management says.

So will Mercedes Chief Executive Dieter Zetsche tolerate the losses at Maybach or pull the plug? Some US dealers and analysts believe he already has decided to let the car gradually fade from view. A logical choice when you sell only 300 cars a year worldwide. But Mercedes insists there is no such plan. “He can blame it on his predecessor, Juergen Schrempp,” says one analyst.

If Zetsche decides to soldier on, he will have to invest heavily to build awareness of the obscure German brand. The effort could take a decade or more. Rival Rolls Royce, by contrast, is one of the best known brands in the world. Many believe Mercedes would have been better off building a “Uber S-Class.”

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