Interview with Mr. Roland Schell, MD Mercedes-Benz Cars Italy

Date of interview: April 24, 2012

Professional Profile: Roland Schell

Notes: Interview by Pietro Montagna

I had the opportunity to interview Roland Schell and I did not let slip the opportunity, trying to bring the discussion on the future of our industry, because speaking about the present would have been disheartening.

The Italian market continues to fall, while the world continues to grow. In 2011, the Italian market for light passengers (cars + light commercial) weighed 2.5% of the world (it was 3.7% in 2008). What is happening and what is the answer of your company?
Of course, the entire industry is affected by the difficult market conditions. Globally, the economy and the automotive world are going through a time of great change, perhaps the most important in history. In Italy we live in a particularly critical phase that is transforming the concept of luxury, that is rapidly changing in the deepest sense, linking more and more at the respect for the environment and innovation for onboard infotainment.

Mercedes-Benz is ready to take this challenge and is already able to offer a range of cars that maintaining prestige and performance guarantees the respect of future environmental regulations and really low fuel consumption, such as the ML 250 CDI which allows a distance of 100 km with 6 liters.

Moreover this 2.100 cc engine with 204 hp and 150 kW of power, won’t been taxed by the recent “Monti’s Law” and is available from the C-Class to the flagship S-Class, passing by M-Class SUV and the SLK Roadster. An engine that nowadays, thanks to the new E-Class BlueTEC HYBRID, bride the clean energy of the electric motor getting an efficiency record of 24 km per liter of diesel.

The great global crisis that is particularly afflicting the automotive world and, as some experts say, is worse than that of the early 1900s. In your personal vision have you got an idea of how to turn this negative period into opportunity?
First, we must distinguish the observation point, the problems are different for the company and the sales network. In any case it is essential to increase as much as possible the flexibility in production planning and sales. This strong, unpredictable and protracted market downturn is a urgent and complex challenge that the houses face, if they are able to react quickly they will come out without any problems, otherwise they will be overwhelmed in a negative vortex from which is almost impossible to escape: it starts with overproduction of the factory and end up with a lot of pressure on the dealer’s network.

Thus, if the reduction in revenue is added to the growing used stock and the zero km cars overstock, the system is at risk. In this moment it is necessary, first, to ensure the proper functioning of the dealerships that must always deliver a good service to the customer, guaranteeing the quality standards of the brand. In short, there is a primary need to work hard to defend the brand.

The private client begins to ask the trusted dealer, with increasing frequency, support for long-term rental contracts. How are you organized to meet these needs?
Yes, individuals are also increasingly interested in the long-term rental and especially the convenience of having a fixed monthly fee that includes all costs related to car service, financial services and insurance. The long-term rental is a more advanced and complex way to purchase, but we expect a growth of the private customers segment also in the coming years. The positioning of our products is well suited to this type of choice.

What’s the way to make the long-term lease growing further: targeted fiscal policy, easy of management by the client, car sharing systems or shared cars, spreading of the buy back?
2011 was a good year for this business, the perspectives would be better if the tax treatment of the company car was aligned with European standards, but unfortunately we have seen in recent weeks that you are going in the opposite direction. And this is certainly a crucial constraint for further growth in the segment of the rental. The timing is not the best for the macroeconomic Italian system, but probably strategic choices and long-term policy decisions would be desirable as well as greater courage to relaunch a segment representing one of the economic engines of our country, living for too long with a period of crisis.

What is, however, your position in relation to the car sharing. Have you deployed any initiatives? What are the results so far?
The big urban centers are constantly rising, there is a growing population and traffic accordingly. Today, more than half the world’s population lives in cities. Constant growth raises unavoidable questions: how can we ensure future urban mobility, environmental sustainability and ensuring appropriate quality of life?

Car sharing is a solution and the Department of Business Innovation at Daimler, since 2009, has launched “car2go”, an innovative car-sharing project that involves eight cities around the world that will become ten by the second half of 2012.

Ulm, Austin (Texas), Hamburg, Vancouver, Amsterdam, San Diego, Vienna and Lyon and , in short, will be extended to Stuttgart and Düsseldorf. There are more than 50,000 customers worldwide and up to now we have had more than 1 million rentals. The average time of rental was between 20 and 40 minutes and the average distance covered between 5 and 10 km.

Do you think that car sharing represents a business opportunity in these times of crisis?
“Car2go” fits perfectly into the business and organizational dynamics of Daimler and allows us to reach new interesting target customers who are not inclined to buy a car. Moreover, it offers the opportunity to increase the visibility of the Smart brand to new potential customers.

After announcements, and delays finally electric cars are a reality and can be purchased or at least booked. In what direction is moving Daimler?
The full electric, with the optimization of internal combustion engines and hybrid, is one of the way of the future and the solution to zero emissions in urban mobility. Smart was the first electric car to leave the stands of Motorshows to get our roads thanks to e-mobility Italy project together with Enel.

And today, in all the Smart Center, you can already book the new generation of Fortwo electric drive. The booking process sees the signing of a pre-contract form and the payment of a deposit of 450 euros (excluding VAT), which will be returned if the customer decides to cancel the reservation before the deadline. Then you can transform the reservation in a real order, choosing colors and any optional equipment of your car. The new Smart electric drive, available in the next summer, is a zero (local) emissions car, appealing and funny to drive thanks to a 55 kW electric motor, which accelerates from 0 to 100 km / h in less than 13 seconds and 120 km/h top speed, powered by lithium-ion batteries. The 17.6 kWh battery provides this agile city car about 140 km of autonomy in the city with zero local emissions.

What are the major obstacles for the spreading of electric cars and what actions may instead support and encourage their development? In particular, what is the role of the government?
Electric mobility requires the joint efforts of manufacturers, energy producers and institutions. Everyone must bring its contribution useful to promote it. For this there is a need of a national plan that provides detailed and practical implementation of infrastructures and regulations for the development of electric cars in Italy. Local authorities can make a good work in this direction: in Rome, for example, electric cars can circulate in restricted traffic zones and do not pay to park in the parking lots. And these are just two examples of encouragement of the use of electric cars.

With regard to the cars that are not properly aimed at the town’s centers, what technical developments can we expect in the near future?
We imagine the future development of the car through three different stages. The first, already in progress, sees a continuous improvement of existing internal combustion engines, gasoline and diesel, more efficient and environmentally sustainable. Then there will be the progressive electrification of the car, through various hybrid solutions in which the electric motor will be increasingly protagonist: the new E-Class BlueTEC HYBRID is the latest example. The third and final stage is the car with zero emissions, solution possible in urban areas with the electric traction and in the extra urban areas with the hydrogen.

Smart Fortwo electric drive is an extremely innovative product that takes us into this new era of mobility. Each of these solutions is certainly an opportunity for all the ‘actors’ in the system, including, of course, our business partners.

(Translated by Raffaele Vincenti)