Daimler CEO in the Green Hot Seat

September 13: Source – Der Spiegel

Zetsch

European automakers are trying to outgreen each other at this year’s Frankfurt Auto Show. The show organizers are offering eco-drinks. Volkswagen is handing out organic meat balls. And Mercedes is showing cars made of leaves. But the story changes when Der Spiegel asks a few tough questions.

The media usually gives industry executives a free pass at the major auto shows, dutifully serving up press releases. Kudos to Der Spiegel for looking beyond the greenwashing in Frankfurt—and conducting a tough interview with Dieter Zetsche, CEO of Daimler.

Here is an extended excerpt from the interview:

SPIEGEL: Mr. Zetsche, what kind of company car do you drive?

Zetsche: It varies. Right now it’s an S 600.

SPIEGEL: What kind of gas mileage does it get?

Zetsche: Just under 17 miles per gallon (14 liters per 100 kilometers).

SPIEGEL: You could drive a significantly more economical hybrid. But so far only your competition produces hybrids. Toyota already enjoys a much more environmentally friendly image because of this technology. Have you ever been envious of your competitor for this reason?

Zetsche: Certainly not for that reason, because our economical and clean diesel engines can certainly give hybrids a run for their money. But I do have respect for our competitors’ PR and marketing efforts when it comes to their hybrids.

SPIEGEL: So it’s all just clever advertising?

Zetsche: Not just that. But I also drive a Smart as my personal vehicle. It consumes a lot less gas than any Toyota.

SPIEGEL: The Smart is your company’s most economical model, but also one of its least successful. The project has supposedly cost more than €5 billion ($7 billion) to date. How much longer will you stick with the Smart?

Zetsche: It’s true that the Smart has cost the company money in the past. But if it didn’t exist, we would have to invent it now. But it’s also true that it has always been very successful in the market. We will be in the black with the Smart starting this year.

SPIEGEL: The hybrid engine is the first new type of automobile engine to come on the market in more than 100 years. But a Japanese manufacturer is responsible for the new engine, not Daimler, the company named after the man who invented the first car. Why did you fall asleep at the wheel?

Zetsche: It just so happens that we are the market leader in the hybrid segment…

SPIEGEL: How so?

Zetsche: … but only in the city bus sector, where I believe the hybrid makes the most sense. Because it is constantly accelerating and braking, a bus represents the most efficient use of hybrid technology. There are many other technologies, such as direct fuel injection, Diesotto, Bluetec and the fuel cell, which we are also pursuing. Nonetheless, we are no longer developing any cars without a hybrid option.

SPIEGEL: Out of conviction or because that’s what the market wants?

Zetsche: Out of conviction that it’s what the market wants. But I also have to say this: Some are currently touting the hybrid as our only salvation when it comes to automotive technology. It can’t be, partly because the higher price limits its marketability. We expect worldwide hybrid sales to increase to 1 million cars by 2010. That would be just under two percent of total automobile sales. Compare that to the worldwide production of clean diesel vehicles — about 13 million in 2010.

SPIEGEL: But your company, together with BMW, is also developing hybrid engines, and you plan to unveil 19 environmentally friendly models at the International Auto Show (IAA). Why have you waited so long?

Zetsche: We already decided which models we would be showing at the IAA two years ago. But the important issue is that we now have a modular concept that allows us to combine optimized gasoline engines and Bluetec diesel with hybrid options at will. And we will also provide specific dates for our market introductions.

SPIEGEL: Nevertheless, Mercedes-Benz still lags behind on environmental protection, even with its conventional engines. BMW scored the top five slots on a list of the most economical models in the mid-sized luxury class. Mercedes doesn’t even make it into the top 10.

Zetsche: You shouldn’t just be looking at certification figures, but also at real auto tests. That’s where the differences among the individual models amount to less than one mile per gallon (a half liter per 100 kilometers).

SPIEGEL: Are you saying that standard fuel consumption tests are unreliable?

Zetsche: No, but standards and reality are not always the same thing. I consider our company to be highly competitive in all areas. We have reduced fuel consumption in our lineup by 30 percent in the last 15 years — more than any other carmaker. We also have the potential to do better than that. And we now plan to improve fuel efficiency even further.

SPIEGEL: But your competitor, BMW, leads the pack of German manufacturers when it comes to fuel efficiency, right?

Zetsche: Certainly not as a rule, but perhaps on individual levels. That’s just the way competition works. Sometimes one company is the leader, sometimes another. We are clearly the leader when it comes to the world’s cleanest diesel technology, Bluetec, as well as in fuel cell technology.

SPIEGEL: Could it be that the population’s environmental consciousness is developing at a faster pace than technology?

Zetsche: Fuel consumption has become an important issue, but it is not the only criterion by which we measure the quality of a vehicle, nor will it be in the future. Other criteria that help us boost the emotional value of our cars for our customers are safety, comfort and performance.

SPIEGEL: Everyone is calling for economical cars, and yet gas-guzzling SUVs are booming in Germany. Does the consumer have a split personality?

Zetsche: There simply is no typical consumer. But many of our customers, even those who buy SUVs, have long opted for the clean and economical diesel engines we offer for these models. Of course, there are also drivers who always want the sportiest and most powerful version, while at the same time insisting that cars should not be allowed to have any CO2 emissions anymore.

SPIEGEL: Can you explain this contradiction for us?

Zetsche: We shouldn’t complain about it. The success of companies like ours is not based primarily and solely on the rationality of our customers. Emotions and enthusiasm are at least equally important.

SPIEGEL: It sounds as if you also benefit from the stupidity of customers?

Zetsche: It has nothing to do with stupidity. What it boils down to is that we also sell emotions, dreams and desires.

SPIEGEL: Is German Chancellor Angela Merkel also selling emotions when she makes climate protection a cornerstone of her policies?

Zetsche: I applaud what the chancellor is doing. She also seeks dialogue with the industry. In essence, it is in everyone’s interest, just as it is everyone’s responsibility, to reduce emissions of CO2 and other gases, because there is clear evidence that there is a relationship between carbon dioxide emissions and climate change. But the important thing is to achieve the greatest possible effect with as little effort as possible. Transportation must make a contribution here. But I would emphasize that it is one of many contributions.

SPIEGEL: Does the CEO of Daimler also discuss climate change within his own family?

Zetsche: I would be lying if I said that we focus on it constantly. But I have two nieces who are very involved. I like to discuss the issue with them, although I am both unable and unwilling to convince them that we are at the forefront of the environmental movement.

***

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  • hopeful

    Talk is Cheap. I can be at the fore-front of anything I say, so long as no one demands to see any evidence…..
    Dear DiamlerChrysler, My emotions, dreams and desires are for a car manufacturer to mass produce a plug-in hybrid. If produced, I will buy one. Are you listening DaimlerChrysler? Are you listening GM (Please actually produce the Volt). If you are not, I bet that Toyota is listening, and will produce one.

  • TSBinLV

    I share the hopes and dreams as Hopeful. I know Toyota is listening…

  • sean

    Is it still DaimlerChrysler or just Daimler? I think they’ve divorced recently.
    Any way, Zetsche drives a car w/ 17 MPG, which is very poor. The second point is how on earth he compares a Smart and Prius (any Toyota as he said). How many seats and how much room does Smart offer? Don’t compare apple and orange. It’s a shame the the interviewer let him go.

  • Andreas

    Spiegel, you are idiots. Why don’t you interview Ford and Chevy for doing nothing. All European auto makers are way ahead of the American competition. I can’t even buy an efficient diesel in this friggin state.

  • Randal

    Who cares about his car? At 17 MPG it is a fuel sipper compared to his corporate jet. And of course, the same goes for most CEOs around the world. Come to think of it, the same can be said for some notable politicians.

  • DaveM

    Asia car makers are eating their lunch.

    In some ways it is nice to see the European big names have their heads almost as deep in the sand as the US manufacturers. Maybe even worse.

    At least some of the US manufacturers have recognized a MPG gap that is impacting sales, even if their efforts to update have been half-assed.

  • domboy

    I think it’s Americans that have their heads in the sand. We’re so stuck on hybrids that we can’t see how good/clean/efficient diesels cars can be. That is why the Europeans are making hybrids. They would much rather sell us diesel cars…

  • bombarier

    These aren’t “tough” questions, they are a tiring list of rhetorical questions by Spiegel trying to make themselves look concerned about the environment. It’s long on emotional drama and short on interest in facts. Why the obsession with hybrid as the end all? At least Daimler tried sticking to the concrete.