In my opinion, hiding commercial AI behind one’s own user interface is a smart move. Mercedes controls the user experience itself and can, in the background, put AI providers into competition. In the Chinese market, for example, DeepSeek-based AI can be offered, and in Europe and the United States, American alternatives. As the industry develops, new alternatives will surely emerge, and it may be that at some point, industrial players will be able to build their own AI model once they first collect 10 years of data from users, the industry commoditizes, and then they might be able to detach from external players if they wish. In any case, keeping the software in one’s own hands is wisdom.
MBG seems to be bringing interesting models to the market, and in addition to interesting technology, a strong brand value that definitely provides pricing power. Furthermore, from a shareholder’s perspective, a good capital allocation strategy, where in addition to dividends, own shares are also bought back, is attractive for a long-term investor. It’s pointless to expect quick profits from this, but it’s pleasant to travel in a Mercedes.
You describe very well exactly how you, as a Mercedes customer, i.e., the car owner or holder, see the factory’s digitalization. It’s two completely different things how the factory directs its energy towards the digitalization of the car and its user experience, of which booking a service appointment via the factory’s application is one example. In addition to this, the factory also builds software that is not related to car manufacturing or the driver’s user experience, but rather to the importer’s and retailer’s own processes. This is what I mean by the value chain, that the factory enters the importer’s and retailer’s processes with its own requirements and with information systems developed for them, which are large investments whose value and efficiency are questionable, but usually also contradictory to what the factory should be doing in the first place.
Take, for example, the brand’s website, where you can make an online appointment. As a consumer, you experience it as great self-service, but you don’t see the cut-and-paste mess that’s being done in the background to ensure the actual repair shop reserves service resources and spare parts. The factory cannot make decisions about what the repair shop uses, but says, “we will bring this solution to the user, and you internally figure out how to implement the actual repair shop process.” There are many such examples, but without going into details now, I’m trying to say that if a house factory starts making kitchen design software, it’s in many ways the same analogy here, that money is being burned on secondary things.
So that my message is not so negative, I feel that changes are also happening. All companies ultimately direct their money and time to core business issues when turnover or profitability forces them to. All unnecessary branches are cut if there is no evidence of their results. In car factories, for example, with Chinese manufacturers, it can be seen that the car manufacturer focuses on the car, and distribution channel operators are chosen based on who is best suited as a seller. And in my opinion, that’s how it should be, that Valio doesn’t tell S-Group how they should implement solutions for selling their dairy products.
Thank you for clarifying your thoughts. I had a slight suspicion that I didn’t understand what you were talking about. I still consider car “mail order” to be an excellent idea for Tesla. It was a great way to enter the market quickly. However, a company already on the market with its own sales and service chain can show better service to the customer precisely with these factory-backed systems. I’ll share my own experience, although from an investment discussion perspective, I suspect I’m a marginal customer because I choose the slices of the cake that I consider affordable.
My example was not about booking an appointment, but about comprehensive car history management regardless of the destination country. It is in no way related to the use of the car, but it is one of the reasons why, after Volvo stopped manufacturing, the brand changed to the one with the star. Buying a Volvo from Sweden is tricky because the factory does not have a centralized database; instead, each country or each dealer records the service history as they see fit. Buying a Mercedes from Sweden or Germany is easy and safe because the Digital Service Book (DSB) in the factory database is international and contains the car’s entire service and repair history. Buying a used car is safe; the factory dares to give a long international warranty even for a used car maintained according to instructions. A Finnish workshop licensed with factory tools can directly continue the required procedures after the car’s previous service history accumulated abroad without needing to do anything “just in case.”
The factory’s motive is not to facilitate the movement of cars from one country to another, but this method effectively stopped odometer tampering. A lightly driven car from the year before last, with a factory warranty, at half the price of a new one, is a good alternative to a new one.
I’m not sure if I understood your comment about workshop processes either? Apps are, of course, used to entice customers into “easy” bookings. I don’t use this offered opportunity myself; instead, I always call a professional first and ask them to check the factory database for what needs to be done next for my car and what an experienced expert might recommend as additional work, if necessary. The factory system supports the fact that I only need to know the registration number, and the system tells me what my car needs next.
I don’t use a so-called authorized dealership, but our family’s cars are serviced by a specialist workshop that specializes in the brand, has trained its mechanics with factory (and Bosch, etc.) courses, and uses factory tools (including service software). The company’s other processes are probably quite different from those of official factory dealerships in this case, but everything that happens on the workshop side must be diagnostics and service guided and monitored by the factory computer. The work itself must be a factory process, because otherwise it won’t work, but you probably didn’t mean quite that?
I find it interesting to see how old manufacturers bend to become sellers of software that offers genuine added value to the customer, when you already have to ask about navigation updates on brand forums?
This MB G 580 EQ seems interesting. Do any experts have any insight into how well it has sold? The company apparently still doesn’t publish sales figures for different models? Here’s a fun little video of someone buying one
I can’t see how they could get sales in China to pick up again. When you look at the Chinese car fleet nowadays, it has become Chinese at a tremendous pace. In my opinion, there is also a general rise in national pride noticeable in China, I guess that also plays a role, Chinese people want to show Chinese success, no longer boast about Western luxury, especially when they think they can get a better Chinese car for half the price than a Mercedes or BMW.
The direction is clear, and it’s downwards, and they are probably just losing money in China trying to hold on to their market share.
No information on sales figures, but I somewhat doubt if the EQ-series G meets what a previous G-series owner expects? It has always been expensive but also an off-road capable military SUV with full differential locks that many others lack.
The first model year of the Geländewagen was 1979, not 1972 as claimed in the video.
The battery G’s tank turn is mostly a gimmick, but the G-turn, where the powertrain forces the rear wheels to follow the front wheel’s track even in a curve, is in some situations a genuinely useful feature of a four-motor electric drive.
Regards, Deputy Leader of the Off-road Truck Platoon (ret.) who was trained in the G-turn by leaning against a tree but was told at the same time not to use it in peacetime exercises. The G goes around that tree without leaning.
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