Mercedes-Benz Aav

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13-4 Mercedes-Benz All Activity Vehicle (AAV) During the recession beginning in the early 1990s, Mercedes-Benz (MB) struggled with product development, cost efficiency, material purchasing and problems in adapting to changing markets. In 1993, these problems caused the worst sales slump in decades, and the luxury carmaker lost money for the first time in its history. Since then, MB has streamlined the core business, reduced parts and system complexity, and established simultaneous engineering programs with suppliers. In their search for additional market share, new segments, and new niches, MB started developing a range of new products. New product introductions included the C-class in 1993, the E-class in 1995, the new sportster SLK…show more content…
For example, many automotive experts believed the superior handling of MB products resulted from manufacturing the best automobile chassis in the world. Thus, each class within the MB line met strict standards for handling, even though these standards might exceed customer expectations for some classes. MB did not use target costing to produce the lowest-price vehicle in an automotive class. The company's strategic objective was to deliver products that were slightly more expensive than competitive models. However, the additional cost would have to translate into greater perceived value on the part of the customer. Throughout the project realization phase, the vehicle (and vehicle target cost) remained alive because of changing dynamics. For example, the market moved toward the luxury end of the spectrum while the AAV was under development. In addition, crash test results were incorporated into the evolving AAV design. For these reasons, MB found it beneficial to place the design and testing team members in close physical proximity to other functions within the project to promote fast communication and decision making. Sometimes new technical features, such as side air bags, were developed by MB. The decision to include the new feature on all MB lines was made at the corporate level because experience had shown that customers' reactions to a vehicle class can affect the entire brand. PRODUCTION PHASE, 1997 The project was monitored by annual updates of

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