When consumers think of an icon brand for premium cars, one name frequently comes to mind – Mercedes-Benz. In 2008, the German automaker sold 37,001 Mercedes-Benz units and 1,111 smart mini-cars in Japan. These numbers were down from 2007 due to the effects of the global recession, but the company recently launched its remodeled E-Class sedan and is confident that if you have a good product, customers will come.

Heading up the Japan operations is Hans Tempel. Born in Bochum, Germany, Tempel first came to Japan between 1986 and 1991 as part of the Executive Training Program. He has been in his current position of president and CEO of Mercedes-Benz Japan since April 2002.

Japan Today editor Chris Betros visits Tempel at the automaker’s offices in Roppongi to hear more.

What is the image of Mercedes-Benz among Japanese consumers?

It is clearly the icon brand for premium cars, and other premium products. You hear people comparing products by saying “This is the Mercedes-Benz of …” and so on. The brand represents solidity, something people strive for and long to earn. The German DNA is well recognized for its classic and high-end positioning.

Where do you rank in the list of best-selling imported brands?

Among the imported brands, Volkswagen is the No. 1 in total volume, but we have been time and again the best-selling brand in the premium segment.

How were sales in 2008 and how are things going so far this year?

In 2008, we sold just over 37,000 cars. In the five previous years before 2008, sales were between 43,000 and 50,000 units. But after the financial crisis last year, namely the Lehman shock, our sales have been down about 30%.

Is the imported car share of the pie getting bigger?

No, it is getting significantly smaller. For many years, the imported car segment represented about 5% of the total market. Last year, it was below 4% in an even smaller market overall. People are reluctant to buy expensive cars and imported cars are among the more expensive cars above 3.5 million yen. If you look at it by segment, cars over 3.5 million yen are less than 10% of the market. Within that, you have about 50% imported brands and that segment contracted by 45% during the first five months of this year.

How do you market the brand?

We do some selected TV and magazine advertising because the premium brand is strongly connected to lifestyles. TV advertising is expensive but you can reach a broader range of customers and also, we are able to encourage our dealers. It’s a visible sign of our commitment to the market and helps their motivation. Our advertising campaigns emphasize the brand, rather than individual models, except in some cases. 

Who are your core customers?

It depends on the model. The upper segment, the more expensive S-Class, attracts people in their 50s and 60s as well as legal entities. The C-Class is more attractive to people in their late 30s and 40s. The A-Class tends to attract ladies, very often as the second car in a household where there is a bigger Mercedes. The B-Class is able to address a very wide range of age groups, families, older people who are downsizing to meet their lifestyle, and quite a number of female customers. We have a very high loyalty rate, especially for S and E-Class.

What about the recently launched E-Class?

We had a great launch event for the E-Class. The car carries the Mercedes-Benz DNA and is probably the most iconic product has all the values of the Mercedes Benz brand – safety, comfort, durability, reliability and performance and environmentally friendly. All that at an affordable price level.

How often does Mercedes-Benz launch a new model in Japan?

Not as often as Japanese makers because they have so many more models. But the life cycle of Japanese cars is not that much shorter than our cars. Developing a fully remodeled product takes about seven years. We have four major model lines – the S-Class, E-Class, C-Class, A and B-Class, so I would say every other year, we have a launch of a new model. Then you have the derivatives, such as station wagons of the C-Class, E-Class, the coupe of the E-Class and S-Class. This year we will have three launches. We had the E-Class in May, the E-Class coupe will be launched in July and the facelift for the S-Class is scheduled in autumn.

How long is the waiting time for a car?

Between 4 to 6 months from the time you place an order, if it has to come from Europe. The majority of our cars are pre-ordered based on the extensive data analysis and market research on what kind of car and options Japanese consumers are looking for. So, if you share the taste of many Japanese, your car may be delivered within a week.

Who are your dealers?

All our dealers are franchisees. We have about 70 contracts with franchise partners and they operate approximately 200 outlets all over Japan. The boutique-like showrooms are mostly Mercedes-Benz exclusive with an identical appearance suitable for the brand. 

How do you get feedback from your customers?

Through dealers, a call center and online. We conduct surveys to see how our customers are satisfied for both sales and services. Our website provides us with a lot of information since many come and visit our homepage. I read various reports and once a month, actual customers’ comments. I also visit dealers frequently to listen to what actually goes on in the field, as does our field force of 10-12.

What corporate social responsibility (CSR) activities is Mercedes-Benz involved in?

We have many and substantial CSR activities and I think that is one of the reasons why we are ranked No. 1 time and again in Nikkei surveys as the most respected foreign brand in Japan. We donated cars after earthquakes in Kobe and Niigata. We have an art project where we send young Japanese artists to Germany for an artist in residence program and vice versa. We sponsor and coordinate exhibitions of these young artists’ artworks created with this program in Berlin and at the Hara Museum in Japan. We sponsor music events with German orchestras and ballet. We support a German-Japan youth summit. We’ve offered test-drives that can be auctioned off for charity.

How about on the environment?

As you may know, Mercedes-Benz has been a leader in automotive technology and environment friendly technology is no exception. We have had a roadmap to the future and the next model embodying this vision is the hybrid coming this fall with our new S-Class. We participate in government-sponsored programs for new technologies worldwide and here in Japan we have contributed to the fuel cell demonstration project. We have introduced six fuel-cell powered cars in Japan.

How many staff do you have in Japan?

We have about 450 working at Mercedes-Benz Japan. We also have a technical center in Yokohama and two facilities in Hitachi and Toyohashi where we prepare cars as they come off the ships and some added functions. Most of our team here at HQ work in two business areas. One is sales – responsible for product matters, marketing communications, dealer support and other areas. The other is after-sales services and parts, mainly responsible for technical related matters.

Do you do most of your day-to-day work in Japanese?

I don’t use my Japanese much. We are very fortunate to have a lot of people who speak English very well.

What is a typical day for you?

Every day is different. I show up here about 9:30. I may be out and about, visiting dealers, or having meetings here. The day often ends with my fulfilling responsibilities at external and social functions.

What is your management style?

I’m not a great fan of meetings where you have many people sitting around the table and not really contributing. I want people who are involved in the issue to take part in the discussion.

What do you drive?

My official company car is an S-Class. My wife drives a B-Class. When I am driving in Tokyo and it is not for work, I love driving a smart.

How do you like to relax?

I am a family man and I also enjoy time with friends. I play golf occasionally and do quite a bit of traveling overseas.

For further information, visit www.mercedes-benz.co.jp

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9 Comments

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  Altria at 10:48 AM JST - 15th June

  Do you plan to introduce a kei-car Benz any time soon?

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  USNinJapan2 at 11:50 AM JST - 15th June

  Altria

  Those POS A-Class Benz's don't qualify?

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  electric2004 at 01:00 PM JST - 15th June

  The smart might fall into the category, if the engine displacement is reduced to the 660 cc limit in Japan.

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  pawatan at 12:15 AM JST - 16th June

  I would love to see a retro-fit S-class with a 660cc engine, sort of like those goofy 50cc scooters.

  Notice I said "see" and not "drive" or "be stuck in traffic behind".

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  nisegaijin at 10:33 AM JST - 16th June

  I would kill for new CL class. Such a nice car.

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  Mittsu at 02:10 PM JST - 16th June

  I wonder what % of Mercs sold in Japan are LHD? and why?

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  USNinJapan2 at 10:02 PM JST - 16th June

  Mittsu

  Don't know the percentage but there's absolutely no good reason why someone in their right mind would by a new left hand drive car in Japan in this day and age. Before it was excusable, and somewhat of a status symbol, since right hand drive foreign cars (=luxury) weren't available and one didn't really have a choice. But now? Why someone would buy one is beyond me. There are even some morons that go out of their way to buy a left hand drive Japanese car, like a Toyota, reverse imported from the American market just to be different.

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  gaijintraveller at 06:29 PM JST - 17th June

  I thought the image was yakuza and they were often bought by illegal entities.

  The desire for LHD hangs over from when imported cars were rare and considered a status symbol. British cars, which are by nature RHD, used to be imported in LHD form because that is what customers wanted, a foreign car that looked foreign.

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  nisegaijin at 12:21 AM JST - 18th June

  Guys, good point. This LHD stuff is just ridiculous! I went to Australia and I saw exactly same cars with RHD, including Mustangs, Corvettes, Ferrari's and Lambos!! Not a single of these you can get with RHD here. Moreover, I see a lot of Jags and Astons with LHD here! what's up with that?

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