FRANKFURT -- These have not been the happiest of times for the German auto industry.
Fallout from the VW Group emissions scandal continues to weigh on consumer confidence, and has placed executives in the uncomfortable position of defendants.
Antitrust regulators are investigating accusations that automakers secretly discussed parts, suppliers and standards and even Chancellor Angela Merkel, a staunch supporter of the industry, weighed in this month, saying that automakers must do more to win back trust.
Daimler CEO Dieter Zetsche seems to have taken that message to heart.
Speaking from the stage of the company’s multilevel pavilion to a packed crowd of journalists last week before the opening of the Frankfurt auto show, Zetsche, the president of the European auto industry association, ACEA, struck a humble tone.
"There has been a loss of trust in the German car industry's power of innovation and sustainability, and I do regret this very much," he said.
But he quickly shifted to offense. "Let me stress at this point that at Daimler we have been doing everything in our power to actively shape the future of mobility for years," he said. "Our advantage is right now we are more successful than ever in our core business, and we can invest massively in our future."
A looming question for European automakers, and especially for Mercedes, is the future of diesel. Zetsche said Mercedes will continue to develop the powertrain, even though the brand has left the diesel market in the U.S. after pioneering it in the 1970s with cars such as the 240D and 300D.
"It's more worthwhile to improve modern diesel engines than to ban them," he said. "We need diesel if we are to achieve our climate targets through less CO2 emissions. That is why Daimler has invested 3 billion euros in the further development of our diesel engines."
At the same time, he noted, Daimler is investing 10 billion euros in its electric vehicle fleet in the next decade. By 2022, Mercedes will offer at least one electrified drivetrain variant in every model series, and eventually to have more 50 electrified vehicle offerings. "These examples show that we are doing our share,” Zetsche said.
It is becoming clear that automakers will need to turn to electrification, and quickly, not only to meet more stringent fleet emissions standards, but also to ensure that their customers will have full access to cities like Paris, London and Beijing that have imposed full or partial bans on diesels. A number of countries, including France and China, have said they will eventually ban internal combustion engines.
This is not something Zetsche agrees with. "Anyone who believes that mobility will become more sustainable by banning a particular type of drive on a particular date is definitely missing the point,” he said. "At the end of the day every electric car is only as sustainable as the electricity it uses.”
Zetsche’s pep talk was the warmup for the introduction of two concepts. The Smart EQ Vision ForTwo points to a future of small, electric and autonomous vehicles that will circulate in “swarms” around urban centers. “You won’t own this car,” Zetsche said, as dancers and singers acted out a musical-style performance.
Daimler’s other concept, the AMG-Mercedes Project One hypercar, could not be more different than the Smart, Zetsche said. “This is about strong genes, it's about adrenaline and it’s all about driving yourself in its purest form.”
The Project One, reported to cost 2 million euros and offer performance similar to a Formula One racecar, was piloted onstage by Lewis Hamilton, Mercedes’ star F1 driver, to pulsating electronic music and a laser light show.
“Since the start of this project, I've come to understand even better why this car is called a hypercar, because in 40 years I haven't experienced the same level of hype about a Mercedes,” Zetsche enthused. “The car industry is an industry full of emotions and this is what makes it fascinating to me.”
In the end, the Daimler CEO’s rational side may favor the Smart concept, but it seems clear where his heart lies.