When looking back over the history of cars in America, there are lots of neat stories where companies or people become odd bedfellows. There’s the story of Henry Ford’s role in the creation of Cadillac, the Chevrolet brothers dedication to building speed parts for Ford engines, and this one about how Mercedes first got their foot in the American automotive door by selling cars through Studebaker-Packard dealers between 1958-1963. Some of the oldest Mercedes dealers in the country started life as Stude retailers and after that company failed, they hung on with the little known (in the USA, anyway) German manufacturer…which was a pretty decent move if you ask us. So how did a former giant that was falling on hard times end up with Germany luxury/sports cars in their showrooms? By way of an aircraft manufacturer, of course. The Curtiss-Wright company was looking to diversify their own business and entered into a “management agreement” with Studebaker-Packard in 1956. This was a move that kept the auto manufacturer out of bankruptcy court and provided some hope that brighter days were ahead.
When the decision was made in 1957 to stop production of dedicated Packard models and simply rebadge Studebakers as Packards, Curtiss-Wright went out hunting around for a luxury brand that they could use to draw people into the showrooms in their large dealer network across the country. Mercedes was a good but unlikely candidate at that point in history because they were such a small volume stateside seller due to the fact that they lacked a good dealer network. It didn’t take too long after the parties got together for Mercedes and Curtiss-Wright to see the beneficial nature of a relationship. Basically Mercedes would have an immediate expansion of their dealer network by thousands of percent and the fee that they’d pay to the company for the right to be in the dealerships would help those guys keep their heads above water.
If you can believe it, Mercedes kept an active (as we understand small) office at the Studebaker headquarters in Indiana and while the corporation that they were aligned with was foundering right in front of them, the Mercedes people were selling more cars than they ever had before, almost by default. They had been working hard to expand their brand awareness and advertising in the USA but nothing did a better job than when people started seeing the three pointed star (land, air, sea) slathered across the windows of their local Studebaker dealers. It bears mentioning that this was nary two decades after WWII concluded so we’re sure there were plenty of people still a little sore over the whole thing but the vast majority of people had gotten over it and were interested in learning more about the good looking cars from Germany (those that could afford them, anyway)
Sales of Mercedes cars had been hovering around 1,000-2,000 units per year prior to the Studebaker-Packard agreement in the USA and by December 9, 1963 they were knocking on the door of 20,000 units per year. That was a staggering growth success in such a short time. Unfortunately as Mercedes fortunes were sky rocketing, Studebakers were entering the darkest of depths. Despite valiant and creative business efforts, the company folded on that very date mentioned above, sending its last car down the line (in the USA…we know about the Canadian cars that soldiered on for a few years) to the tears of many.
Conscious of being closely tied to a failed enterprise, Mercedes paid Studebaker-Packard between four million and nine million dollars in 1964 (depending on who you are listening to) to buy out of the agreement it had with the company. Mercedes then started a company called Mercedes-Benz of North America and offered franchises to many of the dealers they were working with through the Studebaker network. Pretty cool, eh? Certain parts of the country have a longer history with the brand than others but there are a couple of old school Mercedes dealers in New England with their roots firmly tied to the Studebaker-Packard days. There are some that thing Mercedes somehow contributed to the end for Studebaker-Packard but we don’t follow that line of thinking. If anything, it should have helped foot traffic in the showrooms and maybe garnered them a couple more sales…just not enough.
Hey, we would not have believed it either until we heard some automotive journalist buddies talking about this very thing and we dove into it to see for ourselves. Yet another of those interesting chapters in American automotive history that you may have known about…but we didn’t!
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