Mercedes

Mercedes-Benz scored a publicity coup by luring Michael Schumacher out of retirement to race for its new Formula One team. It might backfire if he can’t keep up with drivers a generation younger.

At 41, the seven-time champion is the oldest driver in the series at a time when Mercedes needs to shake off an "old man’s car" image.

Daimler AG’s Mercedes is seeking to recover from a 10 percent sales slide in 2009 and lower the average age of its customers. Some 38 percent of clients in its biggest market of Germany are older than 60, and it’s targeting younger drivers with four new compact cars that will start being released next year.

Mercedes, which also hired 24-year-old driver Nico Rosberg, is betting on Formula One as other carmakers exit and the company’s unions complain about the spending.

Mercedes will cut spending on the series to 60 million euros ($82 million) in two years, partly by cutting 50 of the team’s 400 staff in 2011.

Schumacher “fits perfectly” with Mercedes’s brand. People in their 30s who grew up idolizing the seven-time champion are now looking at making their first premium car purchase. He is the oldest driver in Formula One since Nigel Mansell raced at age 42 in 1995. The series’ oldest driver was Louis Chiron, who raced at 58 in 1958.

Coup of Decade:

There is a history there and Mercedes has effectively captured the value of it.

In Germany, a 177,000-euro gull-wing SLS sports car that Schumacher is promoting in a television advertisement almost sold out in the country even before it goes on sale on March 27. Daimler declined to provide sales figures.

Mercedes drivers are 55.6 years old on average in German- speaking Europe, compared with 45.6 years for BMW and 47 for Audi.

Younger customers are important because if they have a good experience with the brand they’re likely to stick with it, while with older customers there reaches a point when they’ve purchased their last car. Mercedes does not have a good image with younger drivers. It is one of its biggest problems.”

If Schumacher trails younger rivals, it will set back its efforts to change that.

The Formula One involvement is a fine line. If Schumacher is not successful, it doubles the damage.