3/31/2005

Mercedes Benz

DaimlerChrysler announced that it will recall 1.3 million cars in an expanded effort to ensure quality and solve a current electrical problem in the luxury brand of automobile. An alternator crisis in the expensive sedans has made the company decide to replace all of the parts in the cars. This massive projected cost set the price of Daimler stock back a little but it promises to regain ground. Many professionals predict that this recall may have an adverse impact on sales of Mercedes, but common sense says otherwise. Some may veer away from the brand, but no one can deny that a Mercedes is at the top of its class.
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5 comments:

rico said...

In the next few months, we will see less demand for Mercedes. After a few months this will all blow over and Mercedes will have the problem fixed. Their status will remain unchanged, and sales shouldn't change much as a result.

salty said...

I think this will have positive effects for Mercedes. It shows that they care for the safety of the customers. It also shows that they will take a hit in profits because they care for the customer. Many companies have had the same problems with recalls, but when they take quick action to fix it they benefit from it.

Dr. Tufte said...

I agree with the sentiment that Daimler-Chrysler is dealing with this in the appropriate way. However, this company has been faltering on a number of fronts for several years, so it isn't clear at all that this is a good sign.

Rex said...

Over the past ten years or so, Mercedes, along with their European counterparts have been slow to update their products. The Asian companies on the other hand have been obsessively driven to place their products firmly at the head of the first class market. I think this step Mercedes is taking is in the right direction. They need step up and produce the type of product people are paying for.

Isaac said...

Dr. Tufte wrote that he “agrees with the sentiment that Daimler-Chrysler is dealing with this in the appropriate way.” I believe that statement also to be true. The fact that Daimler-Chrysler is recalling those vehicles shows that they care about the safety and quality of the buyer. I believe that the buyer will see this as a sign of quality and will be more attracted to the Mercedes-Benz.