Daimler vs BMW Group: How to Handle Brands

Mercedes-Benz may be enjoying non-stop success in sales both locally and globally, but there is a perspective many fail to see. Following most of Mercedes-Benz’s sales reports, we get a press release from BMW Group stating how they have technically won the sales game as a group.

That shows a very important distinction between the success of these two brands. Yes, Mercedes-Benz the BRAND is winning, but in 2019 no brand exists on its own. Mercedes-Benz is a key part of Daimler AG. BMW is a key part of the BMW Group.

As much as we like to complain that the Germans are all selling similar sausages, Daimler and BMW have a slight difference in their strategy.

Brands and Sub-brands

BMW Group splits the premium market into 4 or 5 segments. Of course, all segments contain some spillover. But what’s important to note is that they’ve kept this structure up for years, almost decades now.

1. Compact, youthful, lifestyle-focused (MINI)
2. Performance, luxury, competitive (BMW)
3. Coach-built, ultra-luxury (Rolls-Royce)
4. Bikes (BMW Motorrad)
5. Hardcore Performance (BMW M)

Daimler AG on the other hand has been rather clumsy with their brands. Similarly, at one point or another, Daimler’s passenger car brand lineup would have mirrored BMW Groups in this way:

1. Compact, youthful, urban-focused (smart)
   
2. Performance, luxury, prestige (Mercedes-Benz)
   
3. Coach-built, ultra-luxury (Maybach)
   
4. Bikes (MV Agusta)
   
5. Hardcore Performance (Mercedes-AMG)

How Things Panned Out

However, as of today, things are quite different. Maybach the 110 year old brand has failed only to become an S-Class trim package. Mercedes-AMG’s 25% stake in MV Agusta was bought back just a few years after the initial purchase. And now we’re hearing that Geely might take the smart brand off Daimler’s hands.

What’s left is the brand Mercedes-Benz, the sub-brand Mercedes-AMG and the trim-level Mercedes-Maybach. Everything successful about Daimler’s passenger cars bear the ‘Mercedes’ name.

BMW Group has seen respectable results since it first relaunched Rolls-Royce in 1998 and MINI in 2000. Rolls-Royce went from selling less than 800 cars in 2005 to selling more than 4000 in 2018. MINI sells more than 300,000 cars annually since 2012.

But looking beyond sales, BMW Group’s strength is in its ability to play up each brand’s edge and cut off what’s unnecessary. The group manages to keep its three main car brands relatively distinct while leveraging the advantages of scale and parts sharing.

Throughout the 1990s, the group owned rights to MG, Rover, Land Rover, Austin and Morris. They ended up using Land Rover technology to kickstart BMW’s own SUV lineup, retained the MINI brand and got rid of the other brands.

What’s the point of all this?

Well there is no point, really. It’s just worth noting that the Mercedes-Benz versus BMW rivalry isn’t quite as clear cut as it seems.

Clearly, Daimler know what they’re doing with Mercedes-Benz on what seems like an unstoppable sales streak. At the same time, BMW Group needs to wake up and push the design envelope the way Mercedes-Benz and Volvo have in the last few years.

It’s also healthy to step back from the whole circus and see the bigger picture every once in a while. In the grand scheme of things, a rivalry between these 2 automotive names further reinforces their brand strengths against the tide of Chinese and all-electric brands on the horizon.