25 years ago: Strategic product initiative gets the go-ahead: The Mercedes-Benz brand becomes cool
From traditional manufacturer of luxury cars to leading-edge full-line provider: this was the path upon which Mercedes-Benz embarked 25 years ago for the development of its passenger car range. In January 1993 the Stuttgart-based brand went public with its decision to launch a strategic product initiative. It took the oldest automobile manufacturer in the world through an expansion of its portfolio to new strength – across all segments and markets. The first effects of the new strategy became apparent even over the course of 1993 in the form of a new design and a reconfiguration of the model designations.
Stuttgart. To follow new paths – and to talk openly about them: this was the decision taken by Mercedes-Benz 25 years ago, when the Stuttgart brand presented its strategy for the development of its passenger car range to leading international journalists.
The information was given to the German media on 22 January 1993 and subsequently to the international media on 26 January 1993. These are the dates that now mark the official start of the strategic product initiative that would proceed over the ensuing years. The press conferences represented a public signal that a time of change and upheaval was about to begin. One of the envisaged outcomes from this process was a major expansion of the product portfolio: more differentiated than ever, technologically innovative, trendsetting and supremely successful all over the world. At the same time the brand would gradually move towards offering a fresher and younger appeal. Or, to put it another way: January 1993 was when the Mercedes-Benz brand began to be cool.
Here is a quick and compact summary of what came out of the initiative: at the beginning of 1993 the brand was active in five segments. In the luxury class with its S-Class (Saloon and Coupé) vehicles, in the intermediate category with what would soon come to be known as the E-Class (Saloon, Estate, Coupé, Cabriolet) and in what at the time was still known as the compact class with the 190 model series, renamed the C-Class in May 1993. In addition there were the SL Roadster models and the cross-country vehicles with the distinctive G in their name.
By ten years later the picture had changed significantly, with eleven passenger car model series and further derivatives in the portfolio: by 2003 there was the A-Class, while the C-Class had acquired an Estate and a Sports Coupé and the SLK (now: SLC) had been added to the range along with the M-Class (now: GLE), the SLR McLaren, the Maybach and the V-Class. On top of these came a whole series of variants from AMG.
Subsequent years saw vehicles such as the B-Class, the CLS, the GL (now: GLS), the R-Class and the GLK (now: GLC) join the product range. From this one can perhaps begin to see how we got to where we are today, when it’s easier to talk about the new categories of vehicle added rather than about segments. Whether it’s the large, medium-sized or small saloons, estates, coupés or cabriolets, or the numerous variants of SUV, a shooting brake or even a pickup: the Mercedes-Benz brand has today become a leading-edge full-line supplier.
Launch of the strategic product initiative
Back in 1993 the picture was not quite so clear. How exactly would the brand present itself from this point on? Customers did not have to wait long for an answer: in that same year, Mercedes-Benz began to provide an important outlook on the forthcoming product initiative. One of the first waymarkers was the design study for an elegant four-seater coupé, shown at the 63rd International Motor Show in Geneva (4 to 14 March 1993). This was the first sighting of the distinctive four-eyed face for Mercedes-Benz that would ultimately go into series production in 1995 in the E-Class (model series 210) and in 1997 in the CLK (model series 208).
In late March 1993 the Board of Management of the then Daimler-Benz AG resolved a radical restructuring of the model nomenclature for the Mercedes-Benz passenger car range, to take effect from the summer of 1993. Following the example of the luxury saloons of the S-Class, the vehicles in the intermediate category (model series 124) would be known henceforth as the E-Class. With the launch of the new model series 202, which also came out in 1993, the compact class became known as the C-Class. The designations for subsequent families of vehicles would also follow this pattern.
Parallel to all this, the commercial release of the C-Class also brought changes to the model designations of all other Mercedes-Benz passenger car models: from now on, a letter or combination of letters – such as C or SL – was used as a prefix to the three-digit number to indicate the class of vehicle, while the letters at the end of the string, such as D, E, T, S, etc., which had hitherto indicated the engine or body variant, would be dropped.
In September 1993 Mercedes-Benz showed its design study for a compact vehicle, the Vision A 93, which would go on to become the A-Class. The production version (model series 168) made its debut in 1997 at the International Motor Show in Geneva.
Within this wealth of variants, we should not forget AMG. In the wake of the cooperation agreement with Mercedes-Benz in 1990, the German Patent and Trade Mark Office recognised AMG as a brand name in its own right in 1993. The C 36 AMG appeared in the autumn of that same year and soon ensured that its presence was clearly felt in terms of numbers: between then and 1997, more than 5,000 vehicles of this powerful four-door sports saloon were built. The important part played by AMG in the strategic product initiative is therefore clear and the course of growth for the performance brand has continued unabated ever since.
Strategic product initiative brings dynamic push
The evolutionary process towards becoming a premium brand of such diversity continued to gain momentum. In April of 1994, for example, Mercedes-Benz showed its first design study for the compact SLK sports car, featuring a vario roof in metal. The R 170 model series went into series production in 1996. The trendsetter with the distinctive three-letter name played a major part in enhancing the youthful appeal of the brand.
Mercedes-Benz was pursuing two important objectives with the “ AAVision” design concept shown at the North American International Auto Show in Detroit in January 1996. This forerunner to the subsequent M-Class (now: GLE) represented the Stuttgart brand’s first foray into the future-orientated SUV segment.
Need for a new perspective
At the same time Mercedes-Benz took the opportunity presented by this vehicle to implement its strategy of stronger globalisation, introducing new production locations. Indeed, the M-Class (model series 163), launched in 1997, was built at the company’s new production plant in Tuscaloosa, in the US state of Alabama. This location marks a milestone on the brand’s journey from the quality mark “made in Germany” to the predicate “made by Mercedes-Benz”. Looking back, the strategic product initiative was an extremely successful course for Mercedes-Benz to take. The process of transformation that began in 1993 did, however, have very serious roots: from the late 1980s on, the motor industry in Europe became a cut-throat environment. The boundaries between the market segments of luxury-class, intermediate and small car were becoming more and more indistinct. Customers, meanwhile, were asking for more opportunities to individualise their vehicles.
With the introduction of its compact class (W 201) in 1982, Mercedes-Benz had already taken a decisive step towards extending its product range beyond its traditional focus on the intermediate and luxury classes. Nevertheless, a summary of the latest developments in the early 1990s revealed a distinctly critical situation: 1992, for instance, was characterised by a reduction of 13,000 in the workforce and by short-time working in the German passenger car plants.
A press release from the summer of 1993 quotes the Chairman of the Board of Management of Daimler-Benz AG, Helmut Werner, as follows: “Without a reduction in our workforce we shall be unable to achieve sustainable improvement in our market position in an intensely competitive environment such as that in which we currently find ourselves. The steps that we are now taking have therefore proved unavoidable.”
The Stuttgart-based brand resolved to extend its range of products significantly and to move very consciously to occupy niche areas. The company also set itself the objectives of reinforcing its international reach, lowering production costs and, despite the significant increase in vehicle variants, reducing component diversity. In this way, the objective of more economically efficient production could be combined with the growing demand of customers for new driving experiences.
The key elements of the new strategy were summarised by Helmut Werner on 28 October 1993 in a presentation to company managers: the challenges faced by the brand lay in devising “a combative policy for our products that addresses these needs” and a “global, strategic basis for the company” as well as in achieving higher productivity and cost efficiencies.
The further course leading to today’s broad product portfolio did not always prove straightforward, but was certainly complex, bringing with it a wealth of experience. The overarching challenge of transforming the brand is long deemed to have been overcome. Mercedes-Benz offers an all-encompassing range of passenger cars covering all important market segments, while ever higher sales records serve to underscore the continuing appeal of the products. They also provide the scope for the important transition of the brand into a new age of mobility – with networked, autonomous and electrically powered vehicles as well as cutting-edge mobility concepts.