GEORG KACHER
Estates, shooting brakes and the A-Class hatch are set to be binned as Merc streamlines and searches for higher profits in the EV future
Merc’s new-age profit plan
The aim is to sell fewer compact cars but with bigger profit margins. Market share is expected to drop by 25 per cent by 2026.
EQE central to the brand, like the E-Class before it. Prices up to grow margins.
Aiming for a 60 per cent increase in market share.
More than half the body styles cur-rently offered by Mercedes are facing the axe, as the company turns its back on staples such as estates and convertibles and instead tightens its focus on a new idea of luxury.
The aim is an electric-led line-up that goes big on self-driving and roomier interiors. Merc wants to in-crease production slightly, and in-crease profits hugely, as the average prices of its cars go up. At the Mercedes-Benz brand’s most recent long-term strategy update, CEO Ola Källenius said the plan was to ensure ‘overproportional growth at the top, organic growth in the middle – and to trim the tree at the bottom,’ add-ing that ‘the entrance point into the Mercedes-Benz brand will be a dif-ferent one than it is today.’
The US and China are seen as having big potential for growth – and those are markets where European favourites such as estates and soft-tops don’t sell well.
Källenius partitions Mercedes’ of-ferings into three distinct segments. The ‘core luxury’ division is Merc’s home turf, where the C-Class and E-Class reside. The ‘top end’ luxury section is the flashiest and swankiest stuff (think S-Class and EQS, G-Class, SL and Maybach) with the highest profit margins, while the ‘en-try luxury’ segment currently com-prises everything running on the MFA2 platform: A-Class, CLA, GLA/ GLB and their EV versions.
If our reading of Stuttgart’s long-term cycle plan is correct, the fiv-edoor E-Class due later this year will be the last Mercedes available as an estate. The CLA expected in 2025 will be the last shooting brake, while the coupe-saloon version replaces the A-Class hatchback.
Mercedes finance chief Harald Wilhelm says the brand is ‘shrinking the entry position from seven cars to four, which just means that we’re go-ing to focus on the margin and the quality more.’
THIS YEAR’S NEW E-CLASS WILL BE THE LAST MERCEDES AVAILABLE AS AN ESTATE MODEL
As for that ‘core’ segment, the two-door versions of the C-Class and E-Class will become one coupe and one convertible, both badged CLE, later this year. The CLS – bigger brother to the CLA – also looks ready for the exit ramp, and don’t expect the next-generation GLC and GLE to come with coupe versions.
‘How can we make growth in the core segment? It
