The return of Mercedes-Benz Maybach: just the right amount of luxury?
Mercedes-Benz is bringing back its Maybach brand after 60 years. Tom McNamara and Irena Descubes of the ESC Rennes School of Business look back at the history of the brand, why it suffered previously, and why it just might be a success this time around.
In 2002, Mercedes-Benz let the world know that after a 60 year absence it would be reviving the historic Maybach brand. The goal was to use the Maybach as a platform to compete head to head with Bentley and Rolls-Royce in that exclusive club known as the ultra-luxury car market, where price literally is no object. Unfortunately for Mercedes-Benz, the brand was a complete and unmitigated disaster, with the company announcing that it was closing the division after less than 10 years of production. So what went wrong? Basically, everything. But first, a quick history lesson.
The Maybach got its name from Wilhelm Maybach, who founded his eponymously named car company in 1909. Previously, Maybach had actually worked with Gottlieb Daimler, one of the founders of the company that would go on to become known as Mercedes Benz. It is a little known fact that Maybach is actually credited with being the lead designer of the first Mercedes automobile. As a sign of his enduring influence, Mercedes-Benz, till this day, still pays homage to his artistic vision which, according to the company, “defined the fundamental characteristics of the modern automobile”. An impressive pedigree, to say the least. So again, what happened?
To be fair, critics said that the Maybach was only a failure in terms of its marketing strategy, business strategy, engineering and appearance. Other than that, the car was fine. The problem, for the most part, was that the high-end customers found in this market just didn’t see the value proposition being offered in the Maybach (aside from famed singers Jay-Z and Kanye). And while Mercedes-Benz has a world class reputation in luxury and high performance, buyers were never convinced that the company had what it took to compete against two of the most well known and venerated names in automobile history, namely Rolls-Royce and Bentley.
Complicating matters even more was the sneaking suspicion by some that Mercedes-Benz was trying to get by on the cheap and was taking short cuts. Whereas Rolls-Royce and Bentley would have well over a century of experience each building hand crafted works of automotive art (with a reported three out of four Rolls-Royces ever built still being on the road), Maybach was seen as the new, and rather ugly, kid on the block.
Yes, each Maybach was hand-built and took five to seven months to complete. Yes, you could get diamond encrusted armrests, a personal humidor for cigars, hand crafted leather seats just like those found in a business jet, and a private ‘theatre-like’ cinema installed for the comfort of passenger in the back. Why, you could even get Kevlar and steel armor plating to protect you from jealous neighbors. None of this, however, deterred critics from calling the car “unappealing” and complaining that the interior and power-train were both a bit “dated.” The main criticism was that the chassis used for the Maybach was basically the same as the W140 platform, the same one used for the 1991-1999 Mercedes-Benz S-Class. Using technology that was at least a decade old to take on a Phantom or Cornich did not strike many as being wise.
But the real thumb in the eye for many was the Maybach’s price tag. The ‘basic’ model, the Maybach 57, started at about $US 343,000 and prices could go well over $US one million for the “luxury” model 62S Landaulet. And yes, if you have to ask how much something is, you probably can’t afford it. But that is not what people were asking. What they were asking was, “How is the Maybach superior to a Bentley or Rolls-Royce?” Due to poor marketing and a poorly perceived design, they never received a satisfactory answer.
To call the Maybach a disaster would be an understatement. Mercedes-Benz supposedly sunk US$1 billion into the brand’s revival (small beer compared to the US$30-to-$37 billion the company lost on its failed merger with Chrysler and the almost US$5 billion squandered on the unsuccessful Smart Car). It was said that Mercedes-Benz lost at least $US 400,000 on each Maybach sold. Luckily, they normally only sold between 150 and 300 cars a year. By comparison, Volkswagen makes about $US 23,000 on every single Porsche it sells.
Mercedes-Benz could only take such a beating for so long before having to throw in the towel. After announcing the end of the Maybach, the company came out with its fall back plan. To fill the gap left by the Maybach, an updated and more lavish version of an existing Mercedes S-series was rolled out. But our story doesn’t end there.
In November of last year, Mercedes-Benz announced the triumphant re-return of the Maybach brand. But apparently still licking its wounds from its last foray into ultra-luxury, this time around plans are far less audacious, with the Maybach being targeted at what it calls the ‘super-premium’ market. Similar to Goldilocks and her porridge, it looks like Mercedes-Benz doesn’t want to provide too much luxury, or too little luxury, but just the right amount of luxury. Capitalizing on its previous stop gap strategy, the company announced that the Maybach won’t be a stand-alone brand, but rather an extended and upgraded version of the successful S-series, and called the ‘Mercedes-Maybach’.
Ola Kaellenius, a marketing executive at Mercedes-Benz, says: “The new jointly branded Maybach-Mercedes is expected to sell well in China, the United States, Russia and Japan,” and his optimism doesn’t appear to be misplaced. Many will be happy to know that since 2012, the number of millionaires living on the planet has increased by about two million (with there being an estimated 100,000 individuals with a net worth of $US 50 million or greater). If Mercedes-Benz can only convince a small percentage of these people to buy the new version of Maybach, the brand will probably be a success.
Dr Tom McNamara is an assistant professor at the ESC Rennes School of Business, France, and a former visiting lecturer at the French National Military Academy at Saint-Cyr, Coëtquidan, France.
Dr Irena Descubes is an assistant professor at the ESC Rennes School of Business, France, visiting lecturer at the University of Economics in Prague and a former visiting lecturer at the French National Military Academy at Saint-Cyr, Coëtquidan, France.