Mercedes-Benz in Australia
During the Ponton Era (1953-1962)

Here is a little bit of a history on Mercedes-Benz in Australia during the Ponton Era. I have used excerpts from the book Southern Star; Mercedes-Benz in Australia by former M-B employee Paul Roleff as his story is extremely detailed, and could not be surpassed, and is an excellent read. It is a history that this Mercedes-Benz Ponton website, should not be without. It is with full credit that I recognize him and DaimlerChrysler Australia who published this well researched book, commemorating 100 years of Mercedes-Benz in Australia.

The first car in Australia was a Benz No. 1 Ideal, which arrived in Sydney, The British Colony of News South Wales 21^st, May 1900. After being imported from England. For a Mr. Henry Vale of Auburn, New South Wales. Private imports of Benz vehicles continued until 1907 when a young German immigrant August Hoette secured the rights for exclusive selling rights to Benz motor vehicles. August Hoette, aged 22 years, arrived from Bremen, Germany in 1901 just after Australia became a nation. His first dealership Benz Motor Agency was set up in 103 Exhibition Street, Melbourne (the current site for Lanes Motors, a Mercedes-Benz Dealership). From his dealership he sold Benzes and a few Mercedes models. Hoette was interned during the Great War as were many other German-Australians and Robert Lane ran the dealership.

During the post WWI era it appears that the German product was hard to sell. Figures show between 1926 and 1935 only 19 cars and 33 trucks were sold before hostilities began again. August Hoette was also instrumental in gaining 20 other German agencies, some of which were, Siemens, Mannesmann, Krupp, and Lurgi. He also founded Pyrox Ltd. (The Australian founder of Robert Bosch Australia) to manufacture spark plugs, fuel injection and automotive electrical equipment.

After the Second World War vehicle production at DBAG had been re­established, and the development of export business assumed priority. By 1949 some 15 export sales personnel were either re­kindling previous associations or seeking new export partners. Hoette resumed DBAG representation in 1950, forming MERBEN Pty. Ltd.; - a utilitarian if not overly imaginative acronym, at Queensberry Street Melbourne.

Initially only a few 170 V/D and 170 S/DS passenger cars and L3500 trucks became available in right hand drive configuration. Given the demographic peculiarities of Australia it was understood, even then, that a future dealer network would best be based on strong regional distributors located in the capital cities. An arrangement, which has stood the test of time.

In Sydney, N.S.W., Clyde Industries Pty. Ltd. (also covering Queensland and the Northern Territory); Melbourne, Victoria remained Lanes (also covering South Australia); West Australia, Diesel Motors; Even the tiny Tasmanian market was catered for by the Wal Davies dealership in Launceston.

It was only a matter of time before the establishment of volume passenger car production in Australia would begin to have implications for vehicle importation. Given the immense demand for passenger cars, and the concern about foreign exchange effects resulting there from, the Federal Government was keen to encourage local manufacture or at least assembly. Under these circumstances it was clear that existing resources at MERBEN Pty. Ltd. were inadequate to deal with the new complexities of the motor business. It was time to utilize the comprehensive export experience now existent at DBAG. During his factory visit in 1951, Hoette requested Willy Zeh, who had previously visited Australia as export sales representative, to be placed as an expatriate with MERBEN, for a period of three years. Zeh arrived in March 1952 and after acclimatization took on the reigns of the Mercedes-Benz activities. The development of the dealer network and the promotion of product were given priority.

At this point it is clear that less than 1,000 Mercedes-Benz vehicles had been sold in Australia in 50 years. Now the market was keen to get on after the war years. Australia's population was 7,000,000 and vehicle ownership in Australia at the time was still a privilege. Australia was hungry for cars! The year 1948 had heralded the new Holden being made by General Motors (GM) in Australia. It received instant tariff protection. Next to no duties! The tariffs dated to before the war when they were set. Britain 45% duty, most favoured nations (Canada & U.S.of A) 55%, others 65% duty. Mercedes-Benz had it tough! Everyone wanted a Holden, Australia's Own! Still, the buyers came. Holdens were hard to get, and there were huge waiting lists for the cars. Australia was economically well off, and this period was a golden era for agriculture as the world recovered from war, Australia "rode on the sheep's back."

In response to by-laws encouraging local vehicle assembly during 1952, an agreement was reached for the assembly of most Australian Mercedes-Benz trucks at Merna motors. During the fifties in excess of 300 Types L3500, L315, L325, L331/332 vehicles (trucks) were built from Semi Knocked Down (SKD) packs supplied by Mannheim and Gaggenau.

The introduction of import licenses for motor cars in 1953 necessitated an investigation into local assembly. Negotiations were held with Martin & King at Clayton, as well as Commonwealth Motors in Sydney, but agreement could be reached with neither organization. In the absence of other suitable facilities there was no alternative but to continue to operate within the constraints imposed by import licensing. By necessity this included regular visits to Canberra to negotiate for licensees. It was opportune that State Distributors possessed import license entitlements, which could also be utilized to supplement Mercedes-Benz requirements. Average annual vehicle sales during the years 1952-55 were around 200 passenger cars comprising Types 170, 180, and later, 220 models as well as some 50 Types L3500, L315, L325, L331/332 trucks.

When the Mercedes-Benz Type 180 Ponton saloon was released, the Australian Motor Manual commented: "This is the first outstanding car to arrive from Germany since the war. It is the first of the marque to feature slab-sided styling. The 180 is notable for its medium performance and smooth side valve engine, surprisingly large passenger accommodation and excellent road stability. The use of swinging half axles in the rear suspension gives the car an unequalled ride over any surface."

There continued to be a shortage of vehicle supply from DBAG because by now the clearly established lead in quality, durability and technical innovation of its products, meant the company was enjoying unprecedented world-wide demand; long vehicle delivery times notwithstanding. In the mid-50s it became apparent that the diversified interests within Pyrox Ltd. prevented appropriate concentration on the activities of MERBEN. The constant juggling of import licenses for the many agencies was seen to be potentially compromising to vehicle sales. Furthermore the world wide export experience within DBAG led to the conclusion that also in this country the marketing of motor vehicles was undergoing fundamental changes which needed to be addressed so that the full potential for Mercedes-Benz products could be achieved. At the conclusion of his contract, Willy Zeh returned to Stuttgart recommending a number of changes for the Australian sales and service organization, including the setting up of a central office by the factory. He returned in May 1955 together with Peter Quartz, who was to be installed as factory representative at the newly established "MERCEDES-BENZ CENTRAL OFFICE" {MBCO} at 606 Burke Road, Camberwell. MBCO commenced operations with a staff of three; Peter Quartz, Anne Meyer as Office Manager, and a little later Fred Bilger as Service Manager. August Hoette relinquished the franchise during the following year.

Of major concern for vehicle manufacturers continued to be the prevailing import licensing restrictions, stifling the realization of market potential. Those European companies aiming for a long-term presence in Australia, made assembly arrangements with local firms. Volkswagen assembled at the Clayton Plant of  Martin & King, Simca joined with Commonwealth Motors and the Borgward Isabella was built by Kenneth Wright Pty. Ltd. in Melbourne. In 1956 BEA Motors who at the time were assembling a few L325 trucks through Peters Diesel on the Main North Road, submitted a proposal for local Semi Knocked Down (SKD) assembly of passenger cars. DBAG were unable to supply such component kits as they were concentrating on the Completely Knocked Down (CKD) concept required for other countries.

Australian Motor Industries, Port of Melbourne circa 1959

"Standard Motor Products Pty. Ltd. after earlier success with Vanguards and Triumphs, found themselves with excessive production capacity in 1957. Theirs was a spacious well-equipped factory, located close to transport facilities and sub-suppliers at Port Melbourne. Furthermore Standard had their own retail outlets in central Sydney and Melbourne, for which they were keen to acquire another car franchise. Early in 1958 there was a change of guard at MBCO when Peter Quartz was suddenly replaced by Dr. Werner Friedlaender, who had in the previous few years represented several German companies in New Zealand. At the time MBCO was well advanced in a feasibility study for the local assembly of cars. This entailed obtaining Government approval and seeking out a suitable local partner with production facilities. The existing import license entitlements held by distributors, and their willingness to place these at the disposal of the local joint venture played a vital role in getting the green light from the authorities, after final representations to the Federal and Victorian Governments by Director Wuttke of DBAG."

On July 30, 1958 a company owned ²⁄₃ by Standard Motor Products Ltd. and ¹⁄₃ by DBAG was formed with a paid up capital of £5, comprising five shares valued at £1. Later it was realized that five shares could not yield a ²⁄₃ – ¹⁄₃ ownership ratio, whereupon the board of directors boosted the paid up capital to all of £6."

The Press release issued at Melbourne and Stuttgart read:

Mercedes-Benz [Australia] Pty. Ltd. founded. Dr. Fritz Konecke, General Director of Daimler-Benz AG. and Mr. A. F. Crosby, Managing Director of Standard Motor Products Ltd. today announced the foundation of a new company in Australia; for the purpose of developing the Australian market share for Mercedes-Benz trucks, passenger cars and engines.

Mercedes-Benz [Australia] Pty. Ltd. is financed by Daimler-Benz AG and Standard Motor Products Ltd. The Company will, in a step by step manner, assemble the Mercedes-Benz vehicle model range, with an emphasis on heavy trucks, and will together with the German Company seek to promote the export possibilities to countries of the South Pacific region.

Dr. Friedlaender continued as resident DBAG representative for Australia, New Zealand, Hong Kong, Philippines and Indonesia, assisted by Service Representative Walter Kiessling. Standard Motor Products Ltd. changed its name to Australian Motor Industries (AMI) and in January 1959 MBAU commenced operation at the Port Melbourne premises of AMI. Mercedes-Benz car and truck sales were integrated into the existing AMI retail and wholesale organizations in Sydney and Melbourne.

Distributor and Authorized Repair Centre map (in German) circa 1958

Strangely dealers are only shown in Melbourne, Sydney, Brisbane, and Adelaide. Repair centers are even shown in small towns like Roma, Mackay, Rockhampton, Toowoomba, Bundaberg, Moree, Armidale, Narribri, Tamworth, Bourke, Cobar, Broken Hill, Dubbo, Orange, Newcastle, Parkes, Katoomba, Parramatta, Bathurst, Wollongong, Goulburn, Wagga Wagga, Mildura, Deniliquin, Canberra, Cooma, Albury, Shepparton, Geelong, Ararat, Albany, Narrogin, Bunbury, Perth, Merredin, Devonport, Launceston, and Hobart.

Appointed car dealers at Fitzroy, Dandenong, Kew, Malvern, Mornington, Ballarat, Geelong, Morwell, and Deniliquin. Distribution in Queensland was entrusted to the Brisbane AMI dealer Parsley Motors, part of the Austral Group, at that time the largest motor group in Queensland, run by Doug Duncan. BEA Motors and Diesel Motors retained their distributorships. A new Distributor was appointed in Hobart; Cooperative Motors covered the southern part of Tasmania and a little later Webster Woolgrowers were set up in Launceston.

Mercedes-Benz Type 190 Ponton sedan (background) and a General Motors Holden (model: EK) in Hong Kong.

At the request of DBAG the territories of Papua and New Guinea, New Caledonia, New Hebrides and Solomon Islands also became MBAU's responsibility. The supply of spare parts to distributors occurred from the existing AMI warehouse at Port Melbourne.

MBAU Ponton Era Technical Training Centre circa 1959

Jack Mawdsley set up an exemplary separate service school and outfitted a spacious but somewhat underpowered Type L319D van for mobile training. The van became famous for being unable to "pull the skin of a rice pudding", but nonetheless did a sterling job in spreading the technical gospel according to DBAG across the breadth of the nation.

The underpowered Type L319D van that was used for mobile technical training, "couldn't pull the skin off a rice custard!"

At the AMI car plant a section was set aside where with the assistance of DBAG experts, a small assembly line consisting of body welding jigs, drive line and trim installation, final assembly and inspection was set up. The first Type 220S Ponton came off the line in March 1959, in the presence of the Victorian Premier (then) Mr. Henry Bolte. Photographic evidence suggests that Mr. Bolte may have been the first person to pilfer the chrome hood star from a Mercedes-Benz. Over the following five years, some 7,500 Type 220 S/Sb/SEb and Type 190 cars were assembled utilizing locally made tyres, batteries, leather seats, trim and paintwork

Victorian Premier Henry Bolte opening the Mercedes-Benz Assembly line in 1959
(also stealing the hood ornament)

Passenger vehicle sales show 729 Mercedes-Benz were sold between July 1959 and June 1960. Not all of these were Pontons. Also, the Type 190SL roadster, 300 "Adenauer" and L319D vans appear to have been imported. Sales figures for July to June of the next year double because of the new model's popularity. By 1960 Mercedes-Benz had increased passenger car sales by 10 fold annually, selling as many cars per year as had been sold in the first 50 years! The experiment had been a success. The marque was now firmly established in Australasia. However, tariff changes in 1964 made local assembly unviable. With only 1,500 vehicles being sold annually (Holden sold 400,000 cars this year with Australia's population now nearly 12,000,000, double 1948) and a "local content" requirement stitched into the new tariffs, it sealed the fate of the local production of Mercedes-Benz cars, thus ending an interesting chapter to history. In 2001, Mercedes-Benz Australia had its most successful year to date, increasing their sales figures of new vehicles by 26% from the previous year to 12,042 passenger vehicles annually.