Mercedes' Shifting Strategy: From High-End To Volume-Oriented Sales

In order to boost profitability, Mercedes' 2022 plan, known as "Economics of Desire," is intended to concentrate more on high-end cars.

More than 75 percent of their R&D budget was devoted to items that competed in the most lucrative market segments—high-end vehicles like the S-Class, SL, and G-Class, as well as the AMG and Maybach brands. Recent indications, however, point to a possible change in strategy for the US market.

Mercedes gave a hint last month at a conference in Las Vegas that 2024 would see a concentration on cheaper vehicles to boost sales. At the meeting, one executive reportedly said, "Last year was about making money; this year, it's about selling more cars."

Namely, this strategy calls for boosting the production of gasoline and hybrid vehicles, with the C-Class and E-Class models as well as their SUV equivalents serving as the primary offerings. Mercedes also intends to launch a CLA substitute in 2024; however, American sales could not start until 2025.

For this, the company will use Mercedes Modular Architecture, which supports combustion and electric engines. Mercedes will also use the future MMA platform for the much-awaited "Little G," which is scheduled to make its debut in 2026.

Electric cars are the platform's first priority; however, internal combustion engines may also be supported if necessary. Due to supply constraints in 2022, Mercedes gave more priority to parts for bigger, more lucrative vehicles. With the EV industry slowing down and financing rates rising in 2024, Mercedes is concentrating on producing more high-volume items.

Mercedes still intends to streamline its portfolio of small cars despite this change, getting rid of models like the A-Class sedan and hatchback in the US. In 2024, they want to launch a minimum of 25 newly designed and upgraded models in the US, with the objective of producing over 300,000 automobiles—an increase over the 282,229 vehicles that were sold in 2023.

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