Is Daimler Making More Motoring Mistakes Or Filling A New Market Niche?

One wonders if the senior management at Daimler Daimler are on the verge of making a tremendous tactical error.

Looking back to November 27th 2011 I wrote a post for Forbes under the title “Maybach Runs Out Of Gas Road”.

It was at that time it finally dawned on the Executive Committee of Daimler AG that their über luxury limousine, Maybach, in either the regular or long wheelbase format was not selling and certainly not taking enough revenue away from Bentley or the prime target…Rolls Royce.

Daimler saw within the accounts the unpleasant truth that they had not made any profit from the 3000 units of the Maybach marque sold since 2002 when it first introduced the once famous pre WW1 badge.

It really felt that Maybach was a victim of the economic recession, the market for a new large car just was not reaching a minimum efficient scale. However, one has to accept that the Maybach was really no more than a hi-rolling S-Class featuring better leather and extra refinements. It may have carried a different hood motif and have had a slightly more luxurious interior. All very nice… but hardly justifying a 100 percent price margin.  For those that disagree, just look at the photographs of an S-Class next to a Maybach. That will reveal how hard it was to tell one from the other. The entry point cost for the supposedly superior marque was USD344,000 and the Maybach Landaulet semi-convertible was on offer at a tad  over USD1m.

So what is one to make of the news that Daimler are ready to launch onto the market a stretched version of the long wheel base top model complete with armour plating. The Mercedes Benz, S-Class Pullman will carry a price tag of USD1m.

I will repeat that…USD1,000,000 (One Million US Dollars).

The Pullman is said to be offered as an S600 5.5-litre twin-turbo V-12; a 4.6-litre and a twin-turbo V-8 has also been considered if there is the demand. Also a hybrid powertrain is possible so as to accommodate cities whose centres frown on extremely large engine vehicles. Given that the Pullman is a mode of transport with passenger serenity in mind there will be no AMG variant.

Now, it would be easy for me to leap straight in and be critical. However, what must be considered is the market that the Pullman is seeking to attract.  The Pullman is trying to appeal to Heads of State, Government Ministers or Captains of Industry that need a mobile working office space as against simply a traveling oasis.

It will boast three rows of seats and the rear two rows will face each other; separated from a front chauffeur compartment by a partition window.  The rear section will offer ample leg room especially if the occupants are sitting and working as against reclining and relaxing.

Is the cost justified?

Arguably the world leader at armouring luxury motor vehicles is “Texas Armoring Corporation” (TAC) of  San Antonio. Jason Forston, Executive Vice President of the company  indicated that whilst the advantage of having a S-Class Pullman direct from Mercedes Benz is that it is a complete factory fit with full and comprehensive Mercedes Benz guarantees, TAC could take a current S-Class long wheelbase that would cost $175,000 and create a “Pullman” style vehicle that was armoured to the highest specification for $325,000. The all in cost would be USD500,000, so whilst not the factory fit,  100 percent Mercedes product… to get the best spec at half the price one has to wonder why Daimler believe they can let Mercedes Benz charge so much?

Who is the competition for the Pullman?

Of course Rolls Royce (owned by BMW) do not make regular products…every car is a bespoke item. However, they do also make       one-off special products that command astronomical fees, e.g. the Celeste is said to have been sold to an Asian buyer for USD1.7m

Of the “regular” Rolls Royce vehicles (I use that term loosely), the most costly motor car one can acquire from Rolls Royce is the Phantom Extended Wheelbase. It has a 453 bhp, 6.75-liter V-12 engine that achieves 0-60 mph in 5.8 seconds.

The list price is GBP350,000 or at GBPUSD 1.7117 equates to USD 599,000. TAC indicated that they worked on several Phantom  models  which even when fully armour plated offer a ride of unmatched smoothness and comfort. Full spec armouring costs USD 300,000 so the fully protected Rolls Royce Phantom would be available at a cost of USD 899,000.

Of course if one is in the market for such a vehicle a mere USD 101,000 is neither here or there, however, given one does not have the prestige of being in a Rolls Royce the extra leg room and working space must be seen as vital if one were to opt for the Mercedes Benz instead of the Rolls.

How long are the vehicles?