cars news 10: Mercedes-Benz’s Zetsche Talks Trump, Pickups in Geneva

Daimler head Dieter Zetsche might have been at the Geneva motor show to introduce the new Mercedes-AMG GT Concept, but in a far-reaching roundtable interview with American journalists, he was willing to discuss far more than the new 800-horse AMG sedan.

With President Trump gearing up to lower emissions standards in the U.S. and threatening import tariffs on vehicles built outside of the United States, Zetsche explained Daimler AG’s outlook on emissions, fuel economy, and trade issues before entertaining questions on the future of the internal combustion engine, autonomous cars, pickups, and the futures of both Mercedes-AMG and Mercedes-Maybach.

Motor Trend: There’s some talk in Washington, D.C., about reducing CO2 and fuel economy requirements for auto manufacturers. Would you welcome that from a Daimler point of view?

Zetsche: Well, obviously we have different regulatory requirements around the globe, which sometimes have different focus points but altogether drive technology in the same direction. Sometimes one region leads the way and sometimes the other does, but our pace of developing technology is not altered by that. So, I don’t think it would be a different world for us if that were to happen, and therefore I’m relatively relaxed and watching what the final outcome will be.

MT: Could we ever get to the point where we would have completely different Mercedes products for the United States market versus the rest of the globe?

Z: Today we obviously have two different sources for regulation in the U.S. [California Air Resources Board states and non-CARB states], and they affect our sales about 50/50 volumewise, but we do not plan to have different vehicles in the States versus globally.

That said, we already have some [model] specifications for some regions and not others, and these specifications might become more pronounced if there were wider gaps in requirements [from market to market].

Electric mobility is a development we will drive forward [regardless of government standards] because we’re convinced that it’s what the future will ask from us, independent of government regulation at [this] point in time.

MT: Are you concerned at all about trade issues in the U.S. such as a rise in taxes, tariffs, or import barriers?

Z: In general terms, we are certainly convinced that free trades is something positive and creates wealth around the globe for all participants. I think I heard a quote from the new president stating the same recently.

If from one or the other [governmental] perspectives there are any imbalances in their management of free trade, they might be addressed then. But at this time obviously there are different concepts and plans [floating around], and as long as we don’t know the planned direction, it doesn’t make too much sense to speculate about adjustments to potentially different border conditions.

I mean, that’s something that wherever in the world we are, we have to accept that governments define the regulation, and we adjust accordingly.

We have a strong position in the U.S., with 22,000 people working there for us, and we have [multiple] locations where they do this, so I’m relatively relaxed on that issue as long as I don’t get worse news.

MT: Do you see Mercedes expanding its manufacturing footprint in the U.S.?

Z: We do that all the time and have done that some time. Right now, we are developing a manufacturing site for vans in the U.S. We are always investing in Alabama, for new products, for new capacity. There’s nothing reactive to a new situation there but rather an ongoing process.

MT: How much life does the internal combustion engine have left in it? What’s the situation for diesel globally?

Z: The progress, which has been made with combustion engines, is amazing. Emissions reductions are continuing, and in that area the difference between a modern diesel and a gas engine is very small.

Obviously in the U.S., if we talk about passenger cars and light trucks, diesel has never played a significant role. That probably won’t change. In Europe, it does. In Europe it provides us, not just as companies but as a society, with an opportunity of 15-20 percent lower CO2 versus gas, and more and more without a downside [thanks to the] more modern emission [systems] of diesel engines.

Therefore we do believe, and our latest diesel engine is proving that, for the total system, including the environmental requirements, diesel is a good thing. A modern diesel is a good thing, and therefore we have developed and invested [in diesel], and we will continue to.

To your overall question, when we start [looking at] heavy duty [freight] trucks, it’s difficult to assume that they will be driven by or that energy will be stored in batteries in the foreseeable future. Gas might be an alternative there, but it will still be powered by a combustion engine.

[If we start looking at] 30, 40, 50 years [from now] it still seems to be a reasonable time span for [internal combustion] technology when it comes to cars. The world will be different in different parts, though; [for example] I have a hard time imagining the infrastructure being built in Central Africa in the next 20 years for electric cars, and there might be some urban areas where you might find 100% penetration of hybrid-electric vehicles.

So I think the world will be pretty diverse, and combustion engines will still have a pretty long life.

MT: Will the Mercedes X-Class pickup be a more premium product, or will it be a more relatively inexpensive utilitarian vehicle like the Sprinter van? Do you have any plans on launching it in the U.S.?

Z: To your first question, the [former] is the one that we are pursuing. It’s somewhat like our [approach was with the M-Class in 1997]. At that time, we thought [M-Class] could take the SUV [upmarket] to the premium segment, and obviously today this was a smart decision. We’re thinking that we’re at a similar point with pickups.

At this point of time, the [X-Class] will be premium and not cheap, but of course, not expensive either. [Also] at this point of time, there’s no plan to introduce it in the U.S. market, the main argument being that in the U.S. market the premium pickup truck is a full-size pickup truck, and the premium midsize is somewhat of a [mystery]. This might develop differently in the future, but at that point of time we have no plans.

MT: The model lineup seems like it’s grown so rapidly over the past couple years. Do you expect that to stabilize or maybe even shrink a little bit going forward?

Z: Well I see no shrinkage, but I don’t see a linear development going forwards, either. We said quite some time ago that we foresee something like 40 members of our portfolio at the end of this decade, and that’s exactly the direction we are taking.

This doesn’t mean in the next decade there will be no expansion, but it will probably be at a slower pace.

MT: Are we ever going to get to the stage where Maybach takes on as much of a role as AMG is?

Z: I don’t think so because a more sporty version is applicable to almost all of our vehicles. Though when we did it with the R-class, perhaps we went a little bit too far. For most, the ultimate luxury that Maybach represents is more difficult to realize on something like a compact car for instance, [than big sedans and SUVs]. Therefore the scope of Maybach will be much more limited.

When you think about the role Maybach played as a stand-alone brand before and the scope it had, and we were looking now at our new approach, at this upper end, I think this is an absolute winning formula. For instance, we continue to sell, two years after its introduction, more than 500 Maybach S-Class vehicles in China alone, and their, uh, dealers are still charging over list price. This is kind of unheard of, and it seems to be a pretty convincing approach for us.

MT: But where specifically is the expansion opportunity for the Maybach brand?

Z: It’s at the top of our line be it SUVs or sedans. Obviously, there are specialty [models] that we have on display here in Geneva. The [Mercedes-Maybach G650] Landaulet is an extreme interpretation, but these are the areas where we see more of a higher possibility [for expansion].

MT: How big do you see the AMG brand growing?

Z: AMG started as a tuner, and then it became the sport interpretation of Mercedes, and now it’s developing into a sports car brand—and this is not happening by accident. We like it that way, and the [Mercedes-AMG GT Concept] shows another possibility of a genuine AMG sports car. It’s not ‘the more the merrier’ but of course we want to maintain the prestige and the value of this brand.

We had a very strong product development [budget] last year, driven by the AMG 43 [line]. I don’t foresee such a growth to be linear, but we will see further growth.

MT: Aside from the AMG GT, the coming four-door, and the coming hypercar, will there be more dedicated models from AMG?

Z: I would say there is certainly more space, but we have no specific plans approved at that point of time.

MT: In the U.S., we’ve had two years of record traffic fatalities. Is that something that you take into account as you’re developing autonomous cars?

Z: We have had two overriding visions for almost decades. One is emission-free driving, and we are getting closer to that one. The other one is accident-free driving. We are definitely getting closer to the latter one. The [benefits of] passive systems, which do not prevent accidents from happening but reduce impact, are now, by far, exceeded by the benefits of active safety [technology], and there these assistance systems are key [to achieving our goal

We do believe that [accident-free driving] is a realistic vision, and that’s why we’re very supportive of [perfecting these] assistance systems, which ultimately will lead to Stage 5 autonomous driving, as well

I would say, beginning of next decade, becomes more and more difficult to have an accident with a Mercedes.