Reshaped strategy: Mercedes focuses more on luxury models

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Mercedes is taking an important step in adopting a new strategy to focus on luxury models. There will be three model categories in the future: Top-End Luxury, Core Luxury and Entry Luxury.

As early as October 2020, Mercedes announced at the annual general meeting of shareholders that it will focus on increasing sales in the top segments – Maybach, AMG and G-Class.

Now, Mercedes is taking another step in this direction and reorganizing its model ranges into three categories:
Top-End Luxury include all Mercedes-AMG, Mercedes-Maybach, top electric models such as EQS and EQS SUV, Mercedes S-Class, G-Class and GLS, limited model series and exclusive collaboration vehicles.

Core Luxury which groups the Mercedes C-Class and E-Class series as well as the electric models built on EVA2 platforms – EQE and EQE SUV which from 2025 will switch to MB.EA architecture.

Entry Luxury which groups the current compact range of which will remain only 4 models instead of 7 models currently. Mercedes doesn’t say which models will disappear but the A-Class sedan and B-Class will certainly not have a successor in our opinion. In the next generation, these remaining 4 models will be built on the new MMA platform, with the first model on this platform due to debut in 2024. The new MB.OS (Mercedes-Benz Operating system) will be introduced with the MMA platform.

Within Top-End Luxury, Mercedes wants to create a program of ultra exclusive collector cars under the name MYTHOS SERIES.

Mercedes plans to increase sales of models in the Top-End Luxury category by 60% by 2026 compared to 2019 and to achieve a profit margin of 14% by 2025 under favourable market conditions. Across the entire portfolio, Mercedes hopes to achieve a profit margin of 8% in very unfavourable times, 10% in unfavourable conditions and 12% in fair market conditions.

Mercedes also wants to increase direct sales and has developed new direct sales and marketing channels – online and offline – so that by 2025 80% of sales in Europe will be direct sales.