Mercedes-Benz to boost profit margins

Mercedes-Benz standardize models
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Premium car manufacturers Mercedes-Benz and BMW are planning to make cars and services more standardized in order to boost profit margins and to simplify the complex list of option for buyers, while giving them the option to personalize their cars.

Both carmakers said last Thursday at Paris Motor Show that this decision aims to attract clients that might be too confused when choosing a car, because of the growing list of model options, multimedia features and safety technologies.

Mercedes-Benz is also looking for new ways to create a balance between standardization and custom building, in order to boost profit margins. Ola Kaellenius, head of sales at Mercedes-Benz said in an interview that “There are two approaches, you build to order or you build to stock”. He also made the difference between Germany and the USA, affirming that “in Germany the usual approach is to build to order, but in the USA the dealer waits for the customer to come to the showroom.”

The Stuttgart based company took the decision to simplify some of its offerings into brand packages, due to the expanding range of trims, safety and multimedia options available in the growing number of model variants. As a consequence, this would be a proper solution for the company to boost profit margins.

Furthermore, Mercedes-Benz takes into consideration creating the “MercedesMe” brand, meant for customers’ interaction with services and authorized personnel. Some clients want to go through the detailed specification list before buying the car and therefore, Mercedes-Benz makes it easier for them to come to a decision.

After all, standardization also comes as a response to the polarization of customer tastes in various countries.