Fu­ture Daim­ler CEO open to work­ing with other au­tomak­ers to ease costs

Gulf Times Business - - BUSINESS -

Daim­ler AG’s in­com­ing chief ex­ec­u­tive of­fi­cer said he’s open to work­ing with other au­tomak­ers and tech­nol­ogy firms to share the bur­den of the in­dus­try’s costly tech­nol­ogy shifts.

“We’re open to talk, if there are con­crete top­ics and it’s a win-win sit­u­a­tion,” Ola Kal­le­nius told re­porters in Las Ve­gas this week.

“But ev­ery­thing that’s im­por­tant to our brand we’ll con­tinue to do our­selves.”

Global au­tomak­ers have stepped up al­liances and col­lab­o­ra­tion projects in re­cent years, over­com­ing deep ri­val­ries, to stem record in­vest­ments in elec­tric and self-driv­ing cars as well as new dig­i­tal ser­vices like ride­hail­ing. Daim­ler, maker of the world’s best­selling lux­ury-car brand Mercedes-Benz, is cur­rently merg­ing its car-shar­ing of­fer­ings with Ger­man peer BMW AG to boost scale. The com­peti­tors are also mulling po­ten­tially deeper tie-ups.

Shar­ing costs on mak­ing cars has been a key driver be­hind many al­liances, in­clud­ing Daim- ler’s ex­ist­ing tie-up with Re­nault SA and Nis­san Mo­tor Co With the loom­ing shift to elec­tric cars, that pres­sure is only in­ten­si­fy­ing.

Bat­tery-pow­ered models re­main more ex­pen­sive to pro­duce than con­ven­tional com­bus­tion en­gine ve­hi­cles, with lit­tle choice for man­u­fac­tur­ers but to boost sales to meet tight­en­ing emis­sion lim­its.

In ad­di­tion, trade ten­sions and un­pre­dictable fall­out from Brexit are hit­ting car­mak­ers’ prof­its.

“In­creased spend­ing on new tech­nol­ogy, ris­ing costs for fad­ing out diesel, in­put-cost head­winds and a cur­rency drag all add to Daim­ler’s woes, sug­gest­ing Kal­le­nius will be laser-fo­cused on cut­ting costs,” Bloomberg In­tel­li­gence an­a­lyst Michael Dean said in a note. Signs of eas­ing US-China trade ten­sions have helped to put the com­pany on firmer foot­ing, he said.

Kal­le­nius, cur­rently Daim­ler’s de­vel­op­ment head who’ll suc­ceed vet­eran CEO Di­eter Zetsche in May, said be­com­ing more nim­ble and ag­ile will be key to nav­i­gate through the in­dus­try’s trans­for­ma­tion.

“We have to some­times think more like a soft­ware com­pany and be fast,” the 49-year-old said.

Daim­ler isn’t pre­pared to co­op­er­ate on de­sign­ing fea­tures like the MBUX in­fo­tain­ment sys­tem, Kal­le­nius said, re­serv­ing joint work for tech­nol­ogy that’s not brand-spe­cific and not at risk of reg­u­la­tory scru­tiny.

The new gad­getry in­cludes voice con­trol, restau­rant search and ar­ti­fi­cial in­tel­li­gence that ad­justs light­ing. Daim­ler al­ready co-op­er­ates with BMW on pur­chas­ing cer­tain com­po­nents, and the two teamed up in 2015 to­gether with Audi AG to ac­quire dig­i­tal map­ping com­pany HERE Tech­nolo­gies.

“We’re open to talk, if there are con­crete top­ics and it’s a win-win sit­u­a­tion. But ev­ery­thing that’s im­por­tant to our brand we’ll con­tinue to do our­selves,” Daim­ler’s in­com­ing CEO Ola Kal­le­nius told re­porters in Las Ve­gas last week.

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