by Mercedes changes strategy: less luxury, more affordability
Mercedes-Benz, long associated with elite automobiles, is changing its approach. The company plans to move away from the emphasis on luxury and focus on more affordable models to increase sales volumes to over 2 million cars per year.
According to sources, the term “luxury” is gradually disappearing from the brand’s official strategy. Internally, they have even started calling it “the L-word,” indicating serious changes in approach.
Financial difficulties
Mercedes’ profits more than halved in the first half of the year, and the automotive division’s margin is only 5.3%. CEO Ola Källenius stated:
“Our industry is currently experiencing heavy rain, hail, storms, and snow simultaneously”
Sources report that excessive spending on premium Maybach and AMG models was one of the reasons for the financial difficulties. The company now plans to balance prices and production volumes.
New models and changes
Mercedes is preparing a large-scale product offensive, including 17 new electric vehicles by 2027 and 19 updated models with internal combustion engines. The company also plans to work more actively in the affordable compact car and SUV market.
These changes are happening against the backdrop of global trends in the automotive industry, where many manufacturers are seeking new ways to maintain profitability. Mercedes seems to be betting on mass appeal rather than exclusivity, which could significantly change its market positioning in the coming years. At the same time, the question remains how this will affect the brand’s image, which has been built on the idea of premium status for decades.
