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Last Updated: Tuesday, 13 September 2005, 07:10 GMT 08:10 UK
New Mercedes boss makes a splash
By Jorn Madslien
BBC News business reporter at the Frankfurt motor show

Mr Zetsche arriving in his Jeep at the Frankfurt Motor Show
Mr Zetsche made a dramatic entrance on the Frankfurt stage

With engines roaring and headlights on full beam, Dieter Zetsche's butch Jeep shot onto the Mercedes stage.

With round, rimless glasses, walrus moustache, baseball cap and leather jacket, Mercedes' new chief executive comes across more like a country & western celebrity than the image of the cautious beancounter which his title suggests.

"All the way from America," Mr Zetsche drawls as he climbs out of the truck and slips into an elegant suit, simultaneously switching from American English to German.

The new boss's less-than-subtle arrival, directly from his job as top dog of poor cousin Chrysler, is expected to mark a radical departure from the past.

Teutonic cowboy

Mr Zetsche earnt his spurs in Detroit, America's Motor City, where - despite having slashed tens of thousands of jobs, closed a number of factories and cut costs by $8bn - he is seen as the hero who followed in the footsteps of legendary Chrysler chief Lee Iacocca and rescued the firm all over again.

Mercedes star
More than $4bn was added to the group's market value following the news of Mr Zetsche's arrival

Earlier this month he took over as Mercedes boss and is due to take the helm as DaimlerChrysler chief executive in January as well. He is therefore preparing to do it all again at Mercedes, which these days lags well behind arch-rival BMW in terms of sales, profits and image.

The fact that the shiny star is no longer synonymous with quality and reliability has been hard for investors to swallow, though not as hard as the slump in DaimlerChrysler's market value on outgoing chief executive Juergen Schrempp's watch.

In July, news of Mr Schrempp's departure and Mr Zetsche's arrival sent DaimlerChrysler's share price 10% higher.

But the removal of one weak link does not mean the next will be stronger, and it is unclear how much of the market reaction was due to Mr Zetsche's arrival rather than to the news of Mr Schrempp's forthcoming departure.

It was probably a combination of the two. Few investors doubt Mr Zetsche's capabilities, despite the mammoth task ahead.

New model army

Showing off his arsenal at the Frankfurt Motor Show, Mr Zetsche unveiled a string of new, luxurious models that were developed under his predecessor, former Mercedes chief Eckhard Cordes.

"Mercedes-Benz is the jewel in the crown of (DaimlerChrysler's) portfolio," Mr Zetsche said - though in truth, both its Chrysler subsidiary and its stake in the European aerospace company Airbus are worthy contenders at the moment for that crown in terms of margins, sales and reputation.

Mercedes boss Dieter Zetsche with his wife and Finnish motor racing driver Mikka Hakkinen
Mr Zetsche gave the new S-class his personal touch

Mr Zetsche's stage performance as he unveiled the latest cars - including the world's fastest sports utility vehicle, the Mercedes ML-63 AMG - should go a long way to win over the sceptics.

In showing off the latest executive S-class, which he insists "sets the benchmark for the entire automobile industry", Mr Zetsche takes his own company car onto stage, where he introduces it jointly with his wife and the Finnish Formula One World Champion Mikka Hakkinen of West McLaren Mercedes fame.

Sceptical reception

In the S-class, the extensive range of luxury gadgets is taken for granted, so the sales pitch is more along the lines of safety.

"The Mercedes-Benz S-class has done more for road safety than any other car," Mr Zetsche declares, explaining how this latest model uses a combination of radar and infrared night vision to monitor traffic ahead, electronically linked directly to a computer that gets the brakes ready if it senses an accident ahead.

But although the cars unveiled are impressive, there are also plenty of ways for them to go wrong.

Given problems in the past, some are concerned that even amidst the mindboggling over-engineering that has gone into the latest S-class, there might be electronic gremlins that could damage the entire marque's image and further alienate its customers - many of whom are migrating to competitors such as Audi A8 or BMW's 7-series.

The new Mercedes S-class
The new Mercedes models are sold on safety as well as splendour

Or take the R-class people carrier represented here with the R-320 CDi, the European version of the grand sports tourer, and the R-63 AMG, which Mr Zetsche describes as "the most powerful space shuttle in the world".

The R is likely to be popular - despite the verdict of some of those who have driven it. The influential Car magazine describes it as "too big, too expensive and really only a four-seater", with too small mirrors, a cheap steering wheel and, worst of all, an already obsolete engine.

Mr Zetsche will be all too aware of such issues and he is clearly ready to bang the drum for the Mercedes marque. Within the car world, hopes are high that he will succeed.


SEE ALSO:
New boss bolsters DaimlerChrysler
19 Aug 05 |  Business
DaimlerChrysler boss to step down
28 Jul 05 |  Business


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