2004 Paris Auto Show, Part VI Page 3

September 25, 2004

2005 Ferrari F430

Hubbert was interviewed at the Paris Motor Show, where Mercedes rolled out an assortment of new models, including the second-generation A-Class and two new Grand Sport Tourer concepts. These, boasted Hubbert, “give my successor something to build on in the years to come.” Mercedes was one of the first proponents of world cars, vehicles that could be sold in virtually identical form, all over the world. Going forward, that will change, Hubbert noted. There will be more customization for specific markets, even if that means something as small as cupholders for fast food-addicted American motorists. That should also help Mercedes’ standing in the quality charts.

If there’s one topic where Hubbert seems genuinely disappointed, it concerns Maybach, the ultra-luxury brand he personal drove to market. Global demand for such vehicles “has diminished markedly” since Maybach was conceived, Hubbert conceded. The brand itself has had to trim back its sales targets from 1000 a year to an annual 600. “It’s not that people can’t afford these products,” Hubbert stressed. “It’s that they don’t want to be seen in them” at a time when there’s growing disparity between rich and poor, and more openly felt hostility towards the trappings of affluence. Yet even while Maybach is struggling, Hubbert noted there are “waiting lists” for the SLR, Mercedes’ $400,000 sports car.

Over the course of a 40-year career, Hubbert has appeared at more than 100 auto shows and countless product launches. He was originally planning to leave a few months earlier, turning over his duties to Wolfgang Bernhard, who’d been the well-regarded number-two executive at DCX’s Chrysler Group. In a stunning and unexpected move, Bernhard’s promotion was rescinded; he resigned from DaimlerChrysler a few months later. It was clear Hubbert did not intend to discuss the internal politics behind the shake-up, other than saying that Bernhard “was not the guy for the job. Wolfgang Bernhard was clearly a car guy and very capable, but at the end of the day, he didn’t fit into the culture of the company.” As for Cordes, Hubbert said, “He builds teams out of good and experienced people. To me, he is a first-class solution. I am very happy with him as my successor.”

Hubbert may be stepping down from his day-to-day duties at Mercedes, but he won’t vanish entirely, staying on for at least awhile as a member of DCX’s powerful executive committee.

Hesterberg Remains Optimistic

Is the glass half full or half empty for Ford of Europe? As he gets ready to return home after five years on the continent, Earl Hesterberg would much prefer to take the optimistic view. Ford’s long-struggling European operations are expected to lose $100 million this year, but that, noted Hesterberg, will be a more than $1 billion year-over-year improvement. And the odds are that the all-new Focus, Ford of Europe’s highest-volume car, launched in Paris, will propel the huge unit back into the black. There are some clear reasons to be optimistic. Ford is gaining traction outside its traditional core markets of Britain and Germany. It is especially strong in Spain and in Italy, where it is now second only to the national brand, Fiat. Getting things in shape has not been easy. During Hesterberg’s tenure in Europe, there have been two complete reorganizations, and several major assembly complexes have been shuttered, including the home base in Halewood, U.K. But as a result, Ford’s European factories are now operating well over 90 percent capacity. Until the cutbacks, it had barely been 75 percent. “I think we’ve got our organization pretty much right-sized,” declared Hesterberg, the head of sales, marketing, and service for Ford Europe. The problems in Europe certainly aren’t over, Hesterberg acknowledged. There’s growing competition from the Japanese and Koreans, steady deflation of one to two percent annually in auto prices, and the weak economy in Germany. “If the German economy improves, it pulls the rest of Europe with it,” said Hesterberg. This coming November, Hesterberg will return to the States. Two months later, he will take over as Ford’s U.S. marketing chief, following the retirement of long-time Ford veteran, Jim O’Connor.

Daewoo’s New Role

In its final days as an independent automaker, Daewoo seemed intent on emulating its cross-country rival, Hyundai. But trying to become a full-line manufacturer all but killed the South Korean car company, which was purchased by General Motors Corp. two years ago. Now Daewoo is being reborn, but as part of GM’s global empire, it has a markedly different role in store. Daewoo is “much more international,” explained Nick Reilly, CEO of GM Daewoo Autos and Technology, or GMDAT. And while the automaker will still market some products under its own name, it will increasingly provide vehicles badged under other GM brand names. Already, about a quarter of the Korean carmaker’s output is being sold as various Chevrolet models, according to Reilly. And as the primary source for Chevrolet’s expansion into Europe, that will increase to nearly 50 percent. As Chevy grows there, it will introduce models specifically designed for Europe. A hint of what’s to come is on display at the Paris Motor Show in the form of the Chevrolet S3X concept — a production version due to follow next year. While its long-time rival, Hyundai, is continuing to move up-market, Daewoo will stay focused primarily on the low and middle segments of the market, Reilly told TheCarConnection.

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