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Monday, Oct. 27, 1997

Automaker looks to bring Mercedes touch to other segments


Automaker looks to bring Mercedes touch to other segments> Staff writer

CHIBA -- German carmaker Daimler-Benz AG is gearing up to broaden its market. It is planning to introduce models into more segments, rather than sticking to the luxury car market, its head of sales and marketing said during an interview at the 32nd Tokyo Motor Show.

"We are already thinking about some additional segments which we'd like to address, and we will make up our mind within the next few months or a year," Dieter Zetsche, a member of Daimler-Benz's Board of Management, told The Japan Times.

This year, Daimler-Benz, which is well-known for its luxury limousines, surprised customers and automakers at Makuhari Messe by introducing an A Class compact car and an M Class sports utility vehicle built in the U.S.

Indicating that the minivan segment is one possibility Daimler-Benz could pursue, Zetsche said, "We have been offering E Class, but that's not really addressing the core of the segment. It's more of a small part of it. So, it could, for instance, be one idea to pursue another product for the segment."

Zetsche added that in the saturated markets of Japan, the U.S. and Europe, no big growth can be expected in the future. In those markets, customer demand is also diversified, he said.

Following its introduction in Europe this year, the company plans to bring its A Class model to Japan next year to compete with domestic automakers, whose strength is considered to be their small passenger cars. "There was no change in our conviction that our core values like quality, safety and comfort have to be at the heart of any Mercedes product we ever launch. But we thought that these characteristics should not necessarily be restricted to the high-luxury segments of the car market," he said, referring to the Mercedes line.

In the shrinking import segment, Daimler-Benz has managed to increase its sales to 32,630 units by September this year, up 3.4 percent from the previous year. Zetsche said the company aims to sell 42,000 units this year.

Despite a sluggish economy triggered by the consumption tax hike in April, Zetsche said, "There is still room to improve. We saw growth opportunities and advantages for opening the brand into the new customer segments."

The leading German firm is also hoping to raise its share of the Asian market from 8.5 percent to 25 percent in 10 years, and to have annual Japanese sales of about 60,000 to 70,000 vehicles by then.

At the motor show, the company also introduced a prototype for NECAR 3, an A-Class fuel-cell powered model with a methanol reformer, which it plans to put on the world market by 2005. Many auto manufacturers are displaying their most advanced environmentally friendly technologies at this year's show, but Zetsche believes his company's world-leading, fuel-cell technology is the most promising.

The company has so far jointly invested about DM580 million (about 39 billion yen) with Canadian firm Ballard Power Systems in a program to commercialize the technology, he said. "Of course, the reason why we invest a lot in this technology is because we are convinced that unlike many alternatives we tried, fuel-cell (technology) has the potential to really address the large segment of passenger cars and commercial vehicles," Zetsche said.



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