Mercedes Brand Building Remains in Trimmed Budget

PARIS, March 8, 2005; Reuters reported that DaimlerChrysler's premium Mercedes-Benz line is pressing ahead with an international branding campaign despite cost cuts in the wake of disappointing 2004 results, a top official said on Tuesday.

Mercedes Car Group division chief Eckhard Cordes stressed this while opening a new Mercedes-Benz centre in a Paris suburb, the first such site outside Germany.

"We have no intention of cancelling or postponing the other brand centres under the efficiency programme," Cordes said.

One of the new centres is under construction in Singapore. Others are planned in Shanghai, Beijing, Milan and London.

Stung by sagging 2004 operating profits, Mercedes has launched an efficiency drive to boost operating results at the division by at least 3 billion euros and more than double its operating margin to 7 percent in 2007.

Branding is increasingly important in an intensely competitive car market, and Mercedes-Benz is pushing hard to burnish its image that suffered under quality problems.

"There are some cars out there in the field which do not meet our quality requirements but all the cars coming off the line today met our quality standards," Cordes insisted.

The new Paris centre -- complete with classic cars and a cafe -- will let clients test drive cars without an appointment and get speedy delivery of cars they order.

France is the fourth-biggest export market for Mercedes.