Crisler Corporation. Senior thesis

220, 300, and 300S were introduced in a Frankfort Auto Show and the model

300S was named the car of the year. From that time, Mercedes started to export more cars around the world. However, most of the cars were sold in

Germany (Consumer Guide, p. 32, 1986).

By 1960, the Mercedes was the number one selling car in Germany, but at the same time, the BMW became a very close competitor. Mercedes lost a large share of the market to BMW. This was a time when the company started to look for new markets. The United States was a promising market for the

Mercedes. In the early 60’s the company increased its sales to 50,000 cars sold in the U.S. (Consumer Guide, p. 46, 1986)However, in the mid 60’s, the sales went down. The new 190D four- cylinder diesel model did not sell well in the U.S. and Europe. It took the company three years until it became one of the leaders of the market.

In 1970, Mercedes introduced three new models, which they called the “New

Generation.” The new models were 280S, 280SE, and 280SL. By that time, the Mercedes became the number one imported car in England, France,

Belgium, Holland, Switzerland, and Austria (Consumer Guide, p. 48, 1986).

Another reason why the Mercedes became one of the most popular cars in the world was its participation in auto racing. In the late 60’s, Mercedes cars participated in nine races and won seven of them. After tremendous racing results, people around the world wanted to purchase the C-111 model which would set up three new world records; however, Mercedes would not make this available to the public for sale. The company was receiving a thousand letters a day with offers buy the C-111 model and in 1976 the similar model C111-11 was introduced at the Geneva Automobile Show. The new model had tremendous power. It had 350 horsepower, and it could get from zero to sixty mph in six seconds. Its top speed was 190 mph. Also, the C111-11 Diesel set a new record in durability by running at a speed of

156 mph for 10,000 miles straight (Consumer Guide, p.55, 1986).

In 1982, the 190 series was one of the best selling models in the world. The 190 model was a small sized car which opened for Mercedes an entirely new market. In Germany, this model became a best selling car in

1985. This was a very important establishment for Daimler-Benz because the

190 model became the number one selling small car in Germany, leaving the long-time leader, BMW, in second place (Consumer Guide, p. 64, 1986).

In the early 1990’s, the Mercedes market share in the United States was greatly decreased. The reason for this was that the Japanese car companies started to produce luxury cars. For example, Toyota was manufacturing Lexus, Honda was manufacturing Acura, and Nissan was manufacturing Infiniti. These cars today are becoming increasingly popular among Americans. However, German management found a way to overcome the competition by building a Mercedes factory in Alabama in

1994. Now, a large share of Mercedes cars sold in the U.S. are produced by

American labor. Producing Mercedes in the U.S. has solved many problems for the company. Many people in the U.S. have an opinion about buying

American-made cars with the purpose of supporting the American economy.

The second problem was that tax on imports was greatly reduced. The cost of a German laborer was 50% higher than an American laborer in Alabama. By building cars in the United States, all these problems were solved

(Fortune, p. 150, 1997).

Similarly, Mercedes used the same strategy in South America. It built a new plant in Brazil. This plant decreased the prices of the cars and made the purchase of a Mercedes more affordable for the South American region (Motor Trend, p. 123, 1997).

In the past five years the demand for 4x4 vehicles has been increasing. Two years ago, Mercedes came up with a new M-class jeep model.

The price of the is jeep is around $34,000, which is competitive with the