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AUTOMAKERS' NEWS * USA - After Pact to Shed Chrysler, DaimlerTurns Focus to Other Challenges
After nearly a decade of trying to be both German and American, DaimlerChrysler AG is going back to its roots, starting with its new name: Daimler AG
New York,NY,USA -The New York Times, by STEPHEN POWER -May 15, 2007: -- With its decision to reduce its stake in Chrysler to just under 20%, the Stuttgart, Germany, company is giving up its ambitions of being a car maker present in every segment of the market. DaimlerChrysler sells 4.7 million vehicles a year, making it the world's fifth-biggest car maker in sales volume. Without Chrysler, Daimler's sales will fall to around 2.1 million, less than those of France's Renault SA -- the world's No. 10 auto maker in terms of vehicle sales... A leaner Daimler will aim to emulate the success of its smaller, longtime rival BMW AG -- a feat many industry analysts think is achievable given the strength of Daimler's premium Mercedes brand. BMW has posted strong results since selling its mass-market Rover car unit in 2000 and concentrating on its premium-car business, including the Mini and Rolls-Royce brands... "With Chrysler leaving the group, the risk profile of this entire company is going to be much more favorable," says Michael Raab, an analyst with Sal. Oppenheim in Frankfurt... Not all industry analysts are equally enthusiastic about Daimler's prospects without Chrysler. Mark Warnsman of Prudential Equity Group LLC in New York says the company should follow Toyota's model for success with its premium Lexus brand. Lexus's design and manufacturing operations are tightly integrated with those of Toyota's mass-market car business, allowing both sides to save money and develop products more quickly... "As painful as it may be for the Mercedes purists to accept, Mercedes is going to need Chrysler," Mr. Warnsman said in a research note earlier this year...
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