2000 G500 NMLE
This from the Financial Times of London:
Mercedes recalls 1.3m cars for quality issues
>By James Mackintosh in London
>Published: March 31 2005 17:49 | Last updated: March 31 2005 17:49
Mercedes-Benz recalled almost one in three of the 4m cars it has sold in the past four years to fix electronic problems that have tarnished its reputation for high-quality cars.
Mercedes, owned by DaimlerChrysler, has seen profits plummet as a 1.2bn provision last year for the costs of fixing problems with cars already sold added to pressure from the weak dollar and losses at its Smart small car operations. In the final quarter of last year Mercedes profits dropped 97 per cent to 20m, and Eckhard Cordes, head of the division, said this yearâ€™s profits would be hurt by the cost of improving vehicle quality.
Mr Cordes said in a statement on Thursday that the repair of 1.3m cars - the companyâ€™s biggest recall - was part of a â€œsystematic approach to qualityâ€?.
The company has been deluged with complaints since it admitted last year that a sharp rise in breakdowns was due to the failure of the complex electronics in its cars. But Mr Cordes said cars being built now were free of the problems.
â€œWe are now producing the best product quality ever and our aim is to ensure that those vehicles in the hands of customers ... [reflect] our highest expectations,â€? he said.
The loss of Mercedesâ€™ coveted position near the top of quality measures has added to pressure on sales from the ageing of several models. But the launching of new cars and offroaders and a 3bn cost-saving and revenue plan is designed to get the company back to 7 per cent profit margins in two years.
Mercedes has previously said the main problems with its vehicles were with the E-Class executive saloon, which makes up a quarter of its sales. But the recall, which is not safety-related, covers all cars with six and eight cylinder petrol engines built from June 2001 to November last year, plus all E-Class, SL-Class cabriolets and CLS-Class coupes made since June 2001.
Mercedes declined to say how much the recall would cost, but analysts said it was likely to be covered by the extra warranty provisions taken last year.
Large recalls are becoming increasingly common at big carmakers as regulators and customers become more demanding. But it is extremely rare to recall more cars than a company builds in a year.