The ratings on DaimlerChrysler AG reflect the broad product and geographic scope of its automotive operations, including its well-established position in the relatively recession-resistant luxury vehicle industry (through its Mercedes Car Group) and its leading position in commercial vehicles. Mercedes Car Group enjoys a leading share of the luxury vehicle market, a solid brand image, and broad geographic diversity of sales. It also remains a substantial earnings contributor. However, recent developments are a cause for concern. Mercedes has been beset by product quality problems, necessitating costly actions to prevent further harm to its brand image, including delays in certain new product launches. In addition, sales of its smart brand vehicles continue to be disappointing, despite a broadening of its product
