German Car Makers
Race to Erect Museums

Germany's luxury-car makers are notoriously competitive. But their latest rivalry isn't over market share or the most advanced brakes. It's a race to build the coolest museum.

In Stuttgart, DaimlerChrysler AG is erecting a towering glass and steel museum for its Mercedes-Benz division that will be as tall as the Statue of Liberty and with nearly three times as much exhibit space as New York's Guggenheim Museum. "Generously dimensioned but not pretentious," a promotional booklet says.

BMW AG in Munich is spending more than $130 million to build BMW World, a futuristic, curving glass structure with shops, a bistro and interactive exhibits intended to allow some 850,000 visitors a year to "see, feel, hear, smell, taste BMW." A brochure likens BMW World to the marketplaces of ancient Greece, proclaiming the project will offer "guests from all over the world...a place for an exchange of thought."

Not to be outdone, Porsche AG plans to demolish a parking lot near its Stuttgart headquarters to make room for a museum capable of holding four times as many cars as the company's current one-room museum. Volkswagen AG, based in Wolfsburg, already operates a theme park, called Autostadt -- complete with museum, restaurant and children's center -- and recently welcomed its 10-millionth visitor.

An artist's rendering of Daimler-Chrysler AG's Mercedes-Benz museum, currently under construction in Stuttgart, Germany

The push to build bigger and flashier shrines to their own past comes amid rising anxiety about competition in the luxury-car market. Facing a growing challenge from newer Asian rivals such as Toyota Motor Corp.'s Lexus brand, which now dominates customer-satisfaction surveys in major markets like the U.S., German car makers are playing up the one area in which they still win hands down: history.

An Asian car maker is even threatening to upstage German companies during next year's World Cup soccer tournament, to be held in Germany for the first time in 32 years. South Korea's Hyundai Motor Co. will be an official sponsor of the tournament, the world's most widely watched sporting event. With hundreds of thousands of fans coming to Germany for the World Cup, and billions more watching on TV, Hyundai's logo will adorn stadiums and Hyundai cars will ferry players to games.

German pride took a similar blow when Anheuser-Busch Cos., maker of Budweiser, was named the "official beer sponsor" of the World Cup, instead of one of the country's highly revered local brewers. Following an uproar, the St. Louis company agreed to allow sale of some German beer inside stadiums.

"This is a very delicate subject," says Matthias Hahn, Stuttgart's deputy mayor. Mr. Hahn vows to come to games in his Mercedes sedan. "They may not drink our beer or ride in our cars," Mr. Hahn says of tournament-goers, "but we're not going to hide."

Mercedes is hoping its massive new museum will draw some of the fans descending on Germany for the World Cup. Exhibits will trace the company's roots to the 1880s. The museum will also stress the prowess of German engineering, saying that Mercedes's founders invented the automobile -- though some historians credit Frenchman Nicolas-Joseph Cugnot with building the first self-propelled land vehicle, a three-wheeled steam-powered carriage, in 1769. Mercedes has been buying back classic cars from customers around the globe for the new museum, which will replace a much smaller museum the car maker now operates. Among the company's acquisitions: a 1901 Mercedes that once belonged to the Vanderbilt family and is one of the oldest Mercedes models still in existence.

The company hopes to open its new museum in May 2006, a few weeks before the World Cup in June. Citing weather-related delays, BMW says its BMW World won't be ready to open by then, but wants to complete the structure's striking exterior in time for soccer fans to see it. BMW also plans to expand a smaller museum it already operates across the street at its corporate headquarters. Porsche doesn't plan to open its new museum until 2007.

"Everyone says what he is doing will be great, but we are convinced ours will be the best," says Jürgen Hubbert, former head of DaimlerChrysler's Mercedes division. A company brochure goes further, calling the museum "one of the most spectacular and most ambitious projects in constructions history."

"Countless plans, meetings, appointments, cups of coffee" went into planning the new structure, the brochure says.

A BMW press release counters that its new museum will "stand out against the museum projects of the competitors" and adds that BMW World will include a theatre, concert space and exhibits on driver ergonomics and the future of car design.

Mercedes's new museum is nearing completion after one of the worst financial years in the division's recent history. Profit fell 47% last year as malfunctioning electronics and other quality problems forced Mercedes to spend heavily to address customer complaints.

Lower profits haven't put a damper on the museum, though. The facility, costing more than $130 million, will have nine levels -- compared with three in the current museum -- and an interior double-helix-like structure with spiraling ramps that will allow visitors to walk through a chronological presentation of the company's history.

One of the museum's leading champions has been Mr. Hubbert, 65 years old, who reels off the names of bygone Mercedes engineers like a baseball fan recalling favorite all-time players. Mr. Hubbert, who retired as Mercedes chief last year, has kept close personal watch over the museum's progress, even tapping wooden floor samples with his shoe heel to make sure they met his standards.

Among the planned highlights of the new museum is a room shaped like a curving racetrack to tout Mercedes's success on the Formula One racing circuit. Other exhibits will show off Mercedes models used by famous people, including 1930s-era cars that belonged to Germany's Kaiser Wilhelm II and Japanese Emperor Hirohito. It will also display century-old tools used by founders Gottlieb Daimler and Karl Benz.

These museums are also forcing Germany's car makers to revisit a dark chapter in their histories. Mercedes's current museum glides over the company's use of Jewish laborers on their way to concentration camps during World War II. The new museum will address "all issues," Mr. Hubbert says.

Porsche's current museum highlights the career of its founder Ferdinand Porsche but largely sidesteps his association with Adolf Hitler, for whom he developed the Volkswagen "people's car." A Porsche spokesman says decisions on "exact presentations" at the new museum are "not yet clear."

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