Mercedes takes on the dinosaurs
By Alastair Doak and Neil MacDonald
MERCEDES-BENZ is smiling with its all-new M-Class off-roader starring alongside those big bad dinosaurs in the film The Lost World.
Steven Spielberg's follow-up to Jurassic Park has broken box office records in the United States, where it notched up sales of about US$120 million during the four-day Memorial Day weekend opening.
Mercedes-Benz has paid handsomely to have the new M-Class four-wheel drive wagon smashed to bits on screen by computer- generated dinosaurs.
With the film all but guaranteed to become the biggest block- buster yet, it appears to be money well spent.
The company is keen to maximize worldwide exposure for the vehicle as it opens a new market segment for Mercedes-Benz.
The M-Class is the German carmaker's answer to Range Rover, although it is expected to be priced under that model at between $40,000 and $50,000 when it goes on sale there later this year.
It is built at a new $300 million plant in Tuscaloosa, Alabama, which has the capacity to build 60,000 M-Class models annually.
Half of these will be sold in North America, the world's biggest off-road market.
Total development cost, including the new plant, has topped $1.3 billion. It took a relatively quick 34 months to take the M- Class from concept to reality.
The Daimler-Benz board member in charge of passenger cars, Jurgen Hubbert, said the M-Class would set a new benchmark in the off-road wagon segment.
"The M-Class combines Mercedes-Benz passenger car qualities such as safety, comfort and handling, with the ruggedness and off-road performance of a true sport utility," Hubbert said.
It will be powered by a 3.2-liter V6 or V8 engine and a third row of seats will be available. It offers full-time four-wheel drive with low range selected by pushing a button on the dash.
Dual air bags and antilock system brakes will be part of the safety package.
Meanwhile, Mercedes-Benz AG is close to pulling out of a $1 billion deal with the Chinese Government to build a minivan in southern China.
According to Automotive News Europe, the company is now "rechecking the feasibility of the project".
Relations have cooled dramatically after two years of tough negotiations with the Guangdong and Hainan provincial governments.
Mercedes-Benz had planned to build 100,000 engines a year at plants in the Guangdong province, near Hong Kong, and on Hainan Island in the South China Sea.
Executives say new tariffs imposed by China and continuing delays in negotiations were making the joint venture "uneconomical".
Mercedes-Benz has notified its German suppliers, who were also due to follow the company into China, that the project was in danger.
In a letter to the suppliers, a spokesman for Mercedes-Benz China, Karin Malmstrom stated: "We are still interested in realizing the project if the originally planned volume is still feasible and if the Chinese side provides the necessary basis for a commercially viable project."
According to Automotive News Europe, Mercedes-Benz won approval to bid for the project after the Chrysler Corp walked away from it.
Chrysler withdrew after two years of negotiations failed to produce an agreement on issues of cost and technology transfer.
Mercedes-Benz has also raised the issue of compensation from the Chinese if the project fails.