With total sales of over a million, the W168 Mercedes A-Class is possibly the best selling commercial flop ever. We chart its fall.
The 2012 announcement of Mercedes’ current-generation A-Class and its re-alignment in ethos and market position was viewed by most observers as an expedient business decision based upon 15 torrid years in the compact car game. While Daimler’s creative U-turn elicited little by way of overt criticism, it could equally be regarded as a clear symbol that the Baden-Württemburg car giant conclusively lost the argument.
The W168 A-Class is a fascinating study as much for what it was as what it came to represent, charting the loss of influence wielded by Mercedes’ once inviolate engineering function. Ultimately however, it illustrates the limits to which an upmarket brand can realistically be stretched. Under the leadership of Jürgen Hubbert, Daimler-Benz embarked on what is best described as a cultural revolution. Having made its name with generations of imperious, rational and expensively engineered saloons, Hubbert saw aggressive market expansion to be where Mercedes’ star should henceforth point.
Having shown the world their intended direction of travel with the Vision and Studie A concepts of 1993 and ’94 respectively, W168 was green-lighted for production. Somewhere around this point Mercedes’ engineers appear to have lost the battle of hearts and minds to sales and marketing, then headed by a youthful Dieter Zetsche. Not only did the car grow 225 mm; although size would remain an issue it would transpire, but both the exterior and interior styling would change drastically, not to mention its overall execution, which would shift from that of a sober Daimler-Benz product to that of a more ephemeral fashion statement aimed at the youth market.
Styling was overseen by director of product design, Bruno Sacco, but it is clear that his ethos of calm (some might say cold) technical precision combined with a disciplined and minimalist form language had fallen out of favour. The eventual styling theme by Steve Mattin embodied a softer, less architectural appearance, aimed it would seem at attracting a more youthful audience. The interior design also carried this through with soft curves and seemingly frivolous touches like the undulating dashboard and ventilation controls. Informal it most definitely was, but hardly in keeping with the Mercedes-Benz tradition.
The A-Class was officially premiered at the 1997 Geneva Motor Show, with cars available in dealerships that October. Once the infamous ‘elk test’ crisis was averted – (Hubbert was said to have offered his head in order to save that of Zetsche’s), the A-Class bedded in with favourable reviews and strong early sales. Initially offered with three engines – two petrol and one diesel – and four power outputs. Larger, more powerful units came later.
But coupled to unease over its specification, positioning and appearance was the fact that its very existence aroused a bitter civil war within the domestic industry. Ferdinand Piëch, VW AG’s chairman was reportedly so incensed by Daimler-Benz’s perceived encroachment on the Golf’s turf, he tore up the gentleman’s agreement that saw the two entities respect one another’s core market, sanctioning an all out push against his Stuttgart-Untertürkheim rival.
Intended to introduce the marque to a younger audience, market projections proved misleading. Mercedes’ sober image it seems, blunted the A-Class’ youth appeal. Yet the wider market found it difficult to pigeon-hole, owing to its almost supermini dimensions, tacitly acknowledged in the 2001 facelift by the inclusion of a longer wheelbase version. The A-Class quickly became a car to trade down to, purchased mostly by retirees rather than defecting Golf owners. Lacking sufficient market experience, Mercedes were perhaps over-confident. So despite selling in excess of a million cars, Daimler lost over €2.5 billion* on the entire W168 programme.
What is clear is that not only Mercedes-Benz engineers but in particular, Zetsche’s sales and marketing team got it wrong. The Vision/Studie A concepts were probably too compact, but despite sales and marketing holding sway on the eventual car’s appearance and positioning, (especially in having the production model enlarged – twice), they also clearly misjudged the market potential of the model. Given the huge losses Daimler-Benz incurred over the programme, it’s now difficult to view it as anything other than a massively expensive error of judgement.
Hubbert gambled the cachet of the three pointed star with a car that failed to deliver on marque values, denting Mercedes’ image, squandering €billions and diverting legions of engineers. The same engineers who it appears took the brunt of responsibility for the car’s failings and whose subsequent demotion within the Daimler-Benz hierarchy is plain to read.
“Your good star of the road” paraphrases an old Mercedes-Benz advertising tag-line, one that offered a reassuring image of an unchanging and unchangeable ethos of doing things the correct, engineering-led way. With change comes risk and some errors brook no return. Because make no mistake, the three pointed star is now as mainstream a brand as anything and lest we forget, it all began with an A.
*Figures from Bernstein Research as quoted in Automotive News Europe.
This piece is a revised version of an earlier DTW article from 2014.