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COPYRIGHT 1996 - 2008
4/6/08

Mercedes The Worst Car

A long time ago and a short time ago. In a place both near and far away a professor thought if he bought a used Mercedes he would have a better than new car. He bought through a dealer with a 2 year warranty a 1989 Mercedes 300E for $18,000 in 1996. It was a nightmare from the first day until sold in 2005 for $200. I complained about the poor workmanship and high cost of repairs for Mercedes to the president of Mercedes at the time Mike Jackson. I attempted to inform him of the disastrous quality of the car. He would not communicate with me and turned me over to an employee. They absolutely refused to believe me and repeated over and over again no one else ever complained

Every semester I would use Mercedes as an example of marketing that allowed a company to sell a product for ten times more than it was worth. Not one student ever believed what I said. I would also ask if they ever owned a Mercedes and they said no. I would then ask from where did their perception arise? They would just laugh at me. We had fun with this and how stupid their professor could be.

I could not believe that every owner was silent. One day while getting gas a fellow Mercedes owner next to me said that these cars wear like iron. I said that my car was a disaster and we were all cheated. He just stared at me and then said yes you are right.

Just now on TV in February 2006 I heard that sales of Mercedes had crashed because the cars were poorly made.

Marketing Application INVISIBLE

I have no idea how this change happened to the perception of Mercedes. How this information about quality moved from a secret held by customers to general knowledge. I knew this in 1996. I informed the President of the company and he refused to respond. My friend a fellow professor who graduated from Yale Law school went with me to Mercedes in New Jersey to complain. He made the point how could Mercedes give me a 2 year warranty and a 5 year 11 % loan knowing that the cars were in such condition. Mercedes wrote back they would do nothing for me.

A company like Mercedes through marketing was able to sell in my view an inferior product for such a large mark up. Once out of warranty they could charge I believe four times more for repairs and parts.
The reason is social status. Driving a Mercedes does give a person social status. When I purchased my seven year old Mercedes my neighbor told me how rich he thought I was. Even after I informed him his car cost more. This happened many times. It would be and was difficult to say at these times that the car is far over rated.
 
The big problem for Mercedes is if they have lost the social status component of the car future sales will continue to decline until they are priced like a fleet Ford. They have a great deal of work to do on their story. With Japanese competition it may not happen. The leadership of Mercedes have no clue how to proceed.