German-American automotive group DaimlerChrysler is in the throes of drawing-up a ten year plan that will result in closer integration of its brands, including flagship Mercedes marque, Chrysler and Japan-based Mitsubishi Motor.
The motivation is cost-led, not marketing-led. Chairman/ceo Jürgen Schrempp has instructed the group’s executive automotive committee (set-up last year to hone strategic inter-brand cooperation) to submit proposals for the integration of dealer services, parts distribution, other logistics services and worldwide salary payments.
Promising to maintain the discrete identities of the brands, Schrempp asked rhetorically: “Why not combine parts departments, workshops and things like that where you can get fantastic scale effects without affecting the brand?”
The strategy links to DaimlerChrysler's recovery plan, now in its fifteenth month, which aims to restore former levels of group margins and earnings per share. The auto giant is on course to hit the target this year, predicts Schrempp: “In 2002, we will have double the operating profit of the previous year plus a substantial amount.”
Data sourced from: Financial Times; additional content by WARC staff