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Daimler Will Drop Maybach Luxury Brand

28 November 2011 - Automotive News

Daimler Will Drop Maybach Luxury Brand

Daimler plans to drop its underperforming ultraluxury Maybach brand and concentrate on increasing sales of its Mercedes-Benz S-class models.

''We decided to go with Mercedes and drop Maybach by 2013, the year when the new S class comes,'' a Daimler spokesman told Automotive News Europe on Monday.

Daimler hasn't made a profit on Maybach since deciding to reintroduce the 1930s-era marque in 2002. The brand's 57 and 62 limousines are poor sellers compared with rival cars from BMW-owned Rolls-Royce and Volkswagen-owned Bentley.

Daimler CEO Dieter Zetsche decided not to push ahead with the development of replacement models for Maybach, which were tentatively due out in 2014, and instead to focus greater attention on the Mercedes.

"We held extensive discussions internally about which way would promise the greatest success in the luxury segment, and we came to the conclusion that the sales chances for the Mercedes brand were better than that of Maybach," Zetsche told the Frankfurter Allgemeine Zeitung newspaper in an interview published on Saturday.

"Mercedes is now also mounting the attack in the high-end segment," Zetsche told the newspaper. "We have always dominated this segment and that should continue to be the case. We don't want to wait until the others pull ahead."

Daimler held extensive internal discussions on "which route promises the greatest possible success in the luxury segment," before concluding that sales prospects were better at Mercedes, the CEO said. The average Maybach takes 60 days to build versus three to four for a typical Mercedes.

"It would not make sense to develop a successor model," Zetsche said. "The coming S-Class is in such a way a superior vehicle that it can replace the Maybach."

Mercedes will double variations of the 72,000-euro ($95,000) S class to six as it seeks to boost annual vehicle sales by at least 10,000 a year and step up its challenge to BMW as the world's top luxury-car maker.

"Closing down Maybach is a rational and financially wise decision," said Arndt Ellinghorst, an analyst at Credit Suisse in London. "The brand has never managed to live up to its heritage. It makes good sense to enhance the S class; there'll be huge demand, especially in emerging markets."

With the S class, Daimler has the possibility to significantly grow its ultraluxury sales, particularly in developing markets such as China, where the demand for exclusive vehicles is growing.

''There is a much higher potential on the sales side. With Maybach, were were talking about 250 or 200 units per year and now we are going for five-digit sales, once all (S class) models are there,'' the Daimler spokesman told ANE.

Despite the decision to drop Maybach, the 57 and 62 models will be produced through to early 2013 when the fifth-generation S class is due.

Maybach was resurrected by Daimler in 2002 following the company's failure to buy Rolls-Royce and Bentley from then-owner, the UK engineering conglomerate Vickers.

The Maybach 57 and 62 were named after their respective lengths of 5735mm and 6170mm. Both were based on stretched underpinnings of then already superseded third-generation S class first introduced in 1991.

Maybach hasn't seriously challenged Rolls-Royce and Bentley since its reintroduction, with sales topping out at 600 cars in 2003 and sliding to 200 last year. Rolls-Royce sold 2,700 vehicles in 2010 and Bentley 5,100.

The brand last year updated its two sedan models with new chrome grills and cleaner 12-cylinder engines, while rear passengers in the $423,500 Maybach 62 got an optional 19-inch cinema screen. And at the Cannes Film Festival in May, it presented a special edition of the 20-foot 62 that was studded with diamonds from Swiss jewelry maker De Grisogono.

While that helped win over stars like Madonna and rapper Jay-Z, Maybach lacked the tradition of rivals and failed to gain a broad following among the world's wealthy, The last of the 1,800 original cars was manufactured in 1941, six decades before the re-launch, and the dealership network in the U.S., where 30 percent of cars were sold last year, has dwindled to 30 from 85.

Daimler had been talking with Aston Martin in the development of future Maybach models. The UK luxury sports car maker, which said at the Frankfurt motor show in September that it expected to conclude talks on cooperation with Mercedes within weeks, declined to comment on the ramifications of Daimler's latest comments on Maybach.

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