Mercedes-Benz will revert to producing luxurious high-tech cars instead of compact vehicles.
Mercedes-Benz wants to reinvent its lineup, again, in an attempt to recapture its luxury carmaker reputation. This means axing compact cars and focusing on quality above quantity.
Since the birth of the brand, Mercedes automobiles were always about ultimate luxury and technology. However, the German manufacturer started falling behind on its charisma, though. Instead of producing the best cars possible, it filled its lineup with models from every segment imaginable. Examples of that are the A-Class hatchback and CLA sedan, which don’t exactly capture the legendary carmaker’s real glamour.
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Ola Kallenius, the CEO of Mercedes-Benz’s parent company — Daimler, shares the same opinion. In his views, Mercedes needs to downsize operational costs by 20% by substantially cutting down its compact vehicles from the portfolio by 2025.
Looking at the stats, though, we notice that the firm’s compact lineup accounts for 25% of the total sales. Moreover, thanks to those vehicles, global sales grew 9.5% in the last year. While such numbers might exhibit a promising future for the compact segment, that simply isn’t going to suffice.
Sales and profit might be a significant concern for businesses, but the legacy is invaluable.
Kallenius stated that the brand will now focus on upscale models, like the S-class and G-class. Furthermore, they plan on doubling their sales of the G-Wagon, AMG, and Mercedes-Maybach by 2025.
With that being said, the news doesn’t really come as a shock, though. Mercedes had already downsized its workforce to cut losses from the slump in sales during the pandemic.
Meanwhile, the company plans to reduce the production of internal-combustion vehicles by 2030 and go all-electric. The automaker also plans to eliminate manual transmission, a drastic yet realistic decision.
Harald Wilhelm, the chief financial officer, commented that Mercedes plans to pursue upscale portfolio profitability. They plan to do that by moving up the existing portfolio margin and directing capital to luxury and high-end vehicles.
Consequently, some compact models might receive an upgrade to match high-end standards. Along with that, Mercedes also prepares a high-end luxury EV crossover.
More details to come soon.
