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Mercedes-Benz to End Relationship With Lowe & Partners/SMS

8 February 1999

Mercedes-Benz of North America to End Relationship With Lowe & Partners/SMS

    MONTVALE, N.J., Feb. 8 -- Mercedes-Benz of North America,
Inc. (MBNA) today announced that it will terminate its relationship with its
advertising agency Lowe & Partners/SMS and the L&P/SMS affiliates Lowe Fox
Pavlika and Diamond Promotion Group effective April 30, 1999.
    According to MBNA, the decision to terminate the relationship with L&P/SMS
was based on the potential conflict of interest following the creation of
DaimlerChrysler relative to Lowe & Partners affiliation with Interpublic Group
of Companies and their global alliance with General Motors as well as ongoing
concern with the current management situation at Lowe which has created a
substantial void within the agency's upper management team.
    "Clearly, we have been pleased with the caliber of the creative work done
by Lowe which showcased the extraordinary strength and appeal of the
Mercedes-Benz model line as well as conveying the multidimensional aspects of
the Mercedes brand.  Unfortunately, there are serious business issues at hand
here which cannot be ignored and which necessitate a new course in order to
continue the record-breaking momentum which we have achieved in this market,"
said Joe Eberhardt, vice president of marketing for MBNA.  Eberhardt said
additional details on how MBNA will move forward with its marketing
communications will be announced in the coming weeks.
    Mercedes-Benz of North America sold 170,245 vehicles in the U.S. during
1998, a 39 percent increase over the prior year as a result of the strategic
foundation that MBNA has laid out over the past six years consisting of:

    --  Product marketing strategy which focuses on innovative, emotional,
        lifestyle-oriented product which makes a strong value statement;
    --  Customer Care Strategy which systematically creates advocates for the
        brand;
    --  Communications Strategy which, in partnership with agencies like
        L&P/SMS, creates communications that establish relevancy and
        aspiration for the product;
    --  Retail strategy focuses our efforts at retail to work with the best
        entrepreneurial partners in the right locations with the right
        capitalization to provide exclusive representation for the brand
        Mercedes in all the major markets.

    "We are committed to ensuring the effectiveness of all of these strategies
which function in concert.  Any time the effectiveness of any of these
strategies is jeopardized, we will take whatever proactive steps are necessary
to remedy the situation," said Mike Jackson, president and CEO for MBNA.