Mercedes USA CEO Dietmar Exler Discusses the Company’s U.S. Strategy for Success

German auto companies operating in the U.S. started 2017 keeping their heads down, posting record sales, making great vehicles here—and hoping to stay out of President Trump’s crosshairs on trade issues. However, after America’s president said that Germany was “very bad” for flooding the U.S. with cars and posting a record trade surplus in 2016 on his trip to Europe in May, they seemed to give up on lying low. Through a trade group, a group of foreign automakers responded with a television commercial touting their American-made vehicles.

Since being named president and CEO of the best-selling luxury brand in America in early 2016, Mercedes-Benz’s Dietmar Exler has emerged as an important spokesman for the premium-segment group, which also includes archrivals BMW and Audi. The 49-year-old leader has emphasized improving the brand’s relationships with dealers, for example.

Before Trump’s trip and remarks, Exler talked with Chief Executive Contributing Editor Dale Buss about the challenges of heading up the sales, marketing and administrative aspects at the German-American hybrid. Here are excerpts from their conversation.

Q: Congratulations on your recent U.S. success. Can you build on it?
A: We had a great 2016, but in 2017, that doesn’t mean much per se. What it does mean is that we are focusing on the right things and what we do resonates with customers. We still have the youngest, freshest product lineup in the industry. And we continue to focus on the customer experience with dealers and how we can provide the best one for them.

“Create effective new channels for communication between top management and employees, and with key partners.”

The Mercedes brand is doing well in the big shift in American consumer preferences toward SUVs. Yes, we’re celebrating 20 years of SUVs; it’s been pretty much a success story. Back then our first one was called M Class. No one was really sure how it would turn out. But now the [successor, renamed] GLE is shaping the segment.

Q: Your parent, Daimler, employs more than 3,500 people making GLEs and other SUVs in Vance, Alabama. Will the company be expanding your production in the U.S. somehow?
A: I can’t share our long-term production strategy. We’re a global company, producing all around the globe. We produce in Alabama right now, and we’re doing a heck of a job to squeeze more than is theoretically possible out of production down there.

Q: How important is it for Mercedes-Benz and your brand that some of your vehicles—in this case, some of your best SUVs—be made in the U.S.?
A: That’s a difficult question to answer. The industry data I’ve seen, by the Automotive Alliance in Washington, indicates that for the vast majority of American consumers, “made in the U.S” is important—but not as important as reliability or functionality.

Actually, in Alabama last year, we made more than 310,000 cars, and we sold 340,000 cars in the U.S. overall. So from that perspective, a very high percentage is actually made in the U.S. And what we make in Alabama isn’t at a “knock-down” facility. They all have enough U.S. content to qualify with official corporate and government guidelines as being made in the U.S.

Q: The company has caused quite a stir by moving its headquarters from New Jersey to near Atlanta, where you’re building a new facility. You were part of that decision before you actually became CEO early last year. What have you learned about how to move a headquarters?
A: We have about 500 people here right now; 300 are new and 200 have been with Mercedes and transferred. You’d better have your act together regarding the culture you want to create, or the 300 new people will create it for you. For example, we pushed for a paperless office five or six years ago, and it didn’t quite work. But when we came [to Atlanta] to a temporary building, we didn’t have storage and we had to go paperless. And it worked because 300 people didn’t know any different. We also are building a much more communications-focused culture than before.

We ask honestly critical questions of our people to push ourselves forward, and by the same token, their feedback is very direct.

EXLER’S KEY PRINCIPLES

• Don’t rest on your laurels—but use a lead to build a bigger lead.
• Leverage opportunities to build the culture you want your company to have.
• Create effective new channels for communication between top management and employees, and with key partners.