NEW YORK, NY -- (MARKET WIRE) -- 05/17/07 -- Shares of DaimlerChrysler are trading near all-time highs as investors applaud the sale of 80% of the company's Chrysler division to Cerberus Capital. Wealthy American consumers agree with the wisdom of the divestiture as their growing dissatisfaction with Mercedes' quality, sales, and service over the past three years indicated pressing problems for the luxury automaker that threatened the venerable Mercedes brand.

Surveys of wealthy Americans' opinions of luxury automobile brands over three years reveal a dramatic drop-off for Mercedes, according to New York City-based Luxury Institute, an independent market research and online peer-to-peer learning community for wealthy consumers and luxury executives.

In one ominous reading of overall brand equity, Mercedes has seen its ranking slip since 2005. The Luxury Brand Status Index incorporates four pillars of value: consistently superior quality, exclusivity and uniqueness, a measure of enhanced social status, and a measure of the ability of a brand to make a customer feel special across the customer experience. Mercedes slipped from number three in 2005, as Lexus pulled ahead into number two in 2006 and has held that spot. Porsche has been ranked the most prestigious brand for the past three years.

Also troubling, wealthy consumers in 2005 perceived Mercedes as having the highest quality, but two years later that has turned into a fourth place ranking. Mercedes has also fallen behind Porsche for perceived social status of somebody who drives one.

Mercedes' tumble has been even more extreme in the area of customer experience. According to the Luxury Institute, from 2006 to 2007, Mercedes fell from fifth (of 11) to ninth (of 10) in the overall Luxury Consumer Experience Index for Luxury Automobiles. Mercedes' worthiness of a significant price premium ranking plummeted from fifth to last, as did brand effectiveness. It also went from fourth to next-to-last in consumer retention and has become the brand wealthy consumers are least likely to recommend.

"It was a classic lack of focus at Daimler that led them to believe they could manage Chrysler without impacting the value of the Mercedes brand," says Milton Pedraza, CEO of the Luxury Institute. "This divestiture promises to be a big step ahead for Mercedes and for luxury consumers who demand better from their brands."

Fortunately for Daimler shareholders there is a favorable historical precedent showing that when a company sheds down-market businesses to focus on luxury, financial rewards follow. Saks Inc. announced plans to sell its mid-market department stores to Bon-Ton Stores. Since last summer, shares of both companies have outperformed the market; Saks is up 50% and Bon-Ton has gained 130%.

In addition to fully vetted, private peer-to-peer networking for luxury firm executives and entrepreneurs, full results of luxury automobile survey data and, insights from the voice of the wealthy consumer, are available to members of the Luxury Board for an annual fee of $995.00. For information, visit, www.luxuryboard.com.

About the Luxury Institute

The Luxury Institute is the uniquely independent and impartial ratings and research institution that is the trusted and respected voice of the high net worth consumer. The Institute provides a portfolio of proprietary publications and research that guides and educates high net-worth individuals and the companies that cater to them on leading edge trends, high net worth consumer rankings and ratings of luxury brands, and best practices. The Luxury Institute also operates the Luxury Board (www.luxuryboard.com), the world's first global, membership-based online community for luxury goods and services executives, professionals and entrepreneurs To reach the Luxury Institute, please call 646-792-2669 or go to www.luxuryinstitute.com.

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