Wall Street Journal article July 22 2003, pg D4

[Gilly]

Mercedes Offers New Cars to 2,000 Customers

Daimler-Chryslers AG's Mercedes-Benz luxury brand is offering new cars to about 2,000 owners of the 2003 E-Class Mercedes who paid for, but never received, a navigation system in their original vehicles.
The company is offering an additional 1,000 customers who wanted the system, but didn't pre-pay for it, a $3,250 coupon toward the purchase of their next Mercedes-Benz.
By offering customers new cars, Mercedes decided to steer clear of a complex retrofitting process, Mercedes spokeswoman Donna Boland said. The situation, reported yesterday by Automotive News, comes as Mercedes is trying to repair some dents to its quality image.
The cars that Mercedes takes back will be sold as used vehicles, Ms Boland said.
When Mercedes began taking its first orders for the E-Series, its customers were aware that supply delays would ultimately force the company to install, or retrofit, independently the navigation system on the vehicles of all customers who ordered the option, she said. The plan, Ms. Boland said, was first to sell the vehicles and then allow the new owners to bring the car back to a Mercedes dealer in the spring to have the system installed.
But in May, Mercedes informed dealers that it would be unable to retrofit the vehicles. "The retrofit is very complex and time-consuming", Ms Boland said. "Our feeling is that the customers would be better served if we could simply move them into vehicles which have already been produced with a new navigation system."
The navigation system, which provides oral and visual navigation assistance, is one part of a broader package od options, dubbed "Comand", for the Mercedes E series. The digital-videodisc-based Comand system also includes a stereo system and a hands-free telephone, among other features. The navigation system was the only component of Comand that Mercedes couldn't deliver in September, Ms Boland said.
All new E-Series vehicles are available with the navigation system, which comes as a factory-installed option, Ms Boland said.
Earlier this month, a survey of vehicle dependability by J.D. Powers & Associates ranked the Mercedes brand below the industry average. The 2003 E-Series vehicles weren't a part of that survey. Mercedes has already resolved most of the concerns reported in the J.D. Power study, Ms Boland said.
The Mercedes E-Class is priced between &47,670 and $55,570, depending on model and options.
The navigation option was priced at $1,625 for those who prepaid for it and currently sells for $2,125.


Gilly