Analysis of Daimler-Chrysler
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In North America, Freightliner Corporation is No. 1 for Class 8 heavy trucks. Sterling makes Class 8 trucks for construction, long-distance haulage and delivery.
It also exists Automotives Electronics which manufactures automotive electronics applications.
Weaknesses:
DaimlerChrysler has several problems:
It still has troubles about the merger between Daimler-Benz and Chrysler Corporation. There is a German dominance in Chrysler decisions which are unacceptable for Americans. So, designers, production people and executives have left Chrysler to join General Motors or Ford. It has an impact of the effectiveness of Chrysler. Furthermore, Chrysler’s range of minivans, jeeps, and sport-utility vehicles are ageing.
DaimlerChrysler announced in 2001 a loss of between €2.2 billion and €2.6 billion for Chrysler Brand
DaimlerChrysler try to lose less money by cutting jobs so the production will not be the same and will probably decrease. 26,000 jobs cut in America with Chrysler. Cut off 15% in the cost of materials and Chrysler claims that more than half its suppliers have already agreed to a programme of drastic cuts in costs over the next three years.
Smaller share in the market than General motors, Ford, in 2001.
Mercedes shares some parts of cars that the consumer cannot see and he will pay more than usual.
Due to Business week: “DaimlerChrysler still has not made money for its shareholders. The stocks trades near its low of 53 and is off about 33% in November 1998”
The Jürgen Schrempp is the chairman of DaimlerChrysler and has a strong personality. He is unpopular.
DaimlerChrysler is not sure about the efficiency of Mitsubishi Motors Company which has a $ 5 billion debt. The CEO Jürgen Schrempp wants to cut the production of Japanese car maker by a fifth with a loss of 9,500 jobs.
Opportunities:
DaimlerChrysler try to enter into a new market like Asian market with Mitsubishi and Hyundai. It also tries to take share market in small cars market like Smart. Different vehicles can shares parts like engine blocks, batteries, gearboxes…
Threats:
An impending recession can appear and consummation can decrease. A new entrant in the automotive market but it is impossible because automotive sector has no space for new entrants.
Investors don’t trust the CEO Jürgen Schrempp because they doubt about him.
American car and light-truck market looks like sliding off its peak of 17.5 million to 16 million in 2000 to around 2001.
Now, we know the position of DaimlerChrysler in 2001, we can find a strategy for the future.
I think it is not so important to try to grow faster by announcing alliances or mergers as much as you can. For DaimlerChrysler, it first has to consolidate Chrysler before trying to go in Asian market. If DaimlerChrysler does not take care of this company, it can lose it and the consequences will be horrible. The CEO Jürgen Schrempp must give more power to Chrysler: Put an American manager at the head of Chrysler and increase advertising showing that Chrysler is an American brand even if it is German to increase share in the US Market. Automotive cars are a source of national pride.
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