Great Rivalries: Mercedes Benz vs BMW

August 24, 2009
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The rivalry between BMW and Mercedes-Benz dates back to 1959. On December 9, Daimler-Benz tried, via the Deutsche Bank, to take over BMW, which was on the brink of bankruptcy. But the minor shareholders, the dealers, and the unionized workforce prevented the takeover at the eleventh hour. Over the next few years, the Quandt family bought a majority stake in BMW, but even with fresh cash, it took the company until the early 1970s to establish a truly competitive model range. From that point to the present day, Mercedes-Benz and BMW have been fighting each other in the marketplace. Instead of aiming at gaps in the enemy's product portfolio, each would invariably challenge the other head-on. The current lineup still reflects this eternal duel: 1-series vs. A/B-class, 3-series vs. C-class, 5-series vs. E-class, 6-series vs. SL, 7-series vs. S-class, X3 vs. GLK, X5 vs. ML, Z4 vs. SLK, Mini vs. Smart, M division vs. AMG, Rolls-Royce vs. Maybach, BMW Sauber vs. McLaren-Mercedes. Both makes ventured downmarket by teaming up with a volume brand, and both failed: while the Bavarians almost went under together with Rover, the Swabians can still feel the aftermath of the Chrysler debacle. BMW hasn't followed its rival into trucks and buses, and Mercedes has steered clear of motorcycles.
Strangely, neither firm recognized the importance of hybrids until recently. In the small-car segment, BMW has been arguably more successful than Mercedes with its pricey and prestigious Mini brand. The opposing Smart brand has only the rear-engine ForTwo, which is still dynamically flawed. The ForFour sedan and the roadster/coupe were quickly withdrawn due to slow sales, and the proposed ForMore never saw the light of day. In 2012, BMW will launch the supergreen Project i family to form its third satellite (after Mini and Rolls-Royce), while Mercedes is currently looking for a partner (Peugeot? Renault-Nissan?) that will develop, build, and share the still-tentative next-generation Smart microcar.
Both companies need a partner to boost volumes and cut costs, but the Not Invented Here syndrome still looms large in both R&D centers and in corporate headquarters. This puts the former archenemies into a strangely deadlocked situation. Although they both can see the benefits of a direct tie-up, the two brands, at a critical point, are actually drifting apart. It will be interesting to see whether the chiefs, Norbert Reithofer and Dieter Zetsche, and the Quandt family can - possibly with the help of a third party - streamline their efforts. After all, as much as car enthusiasts have benefited from the fifty-year rivalry between BMW and Mercedes-Benz, we're more interested in seeing them thrive than in seeing their rivalry survive.
Same destination, different routes
-Mercedes-Benz goes with superchargers; BMW goes with turbochargers
-BMW introduces a V-12 in the 750iL; Mercedes follows with the S600
-BMW develops prototype V-16 for Rolls-Royce; Mercedes contemplates V-24 for Maybach
- BMW tries C1 city bike; Mercedes launches Smart
-BMW waits twenty years, then copies Mercedes-Benz's diesel
-BMW favors hydrogen; Mercedes favors everything but hydrogen
- BMW shows M1 Homage; Mercedes actually builds gull-wing SLS
-Mercedes creates DTM monster 190E 2.3-16; BMW retaliates with E30-chassis M3
- BMW introduces high-class X5 to counter low-quality Mercedes ML-class
-BMW builds South Carolina plant; Mercedes builds Alabama plant


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