In a stark strategy change for the German car giant, it has announced plans to ditch its cheaper models and hike prices for increased profits.
Mercedes-Benz is set to axe three of its most affordable models, as part of as upcoming business restructure aimed at boosting profits.
Meanwhile, the entry-level models which are retained in the line-up are set to adopt price hikes to “maximise the potential of Mercedes-Benz.”
A greater focus will be placed on expensive cars, with “75 per cent of [new company] investments to develop products for the most profitable market segments.”
“What has always been the core of our brand is now also the core of our strategy: the luxury segment,” Mercedes-Benz executive Ola Källenius said in a media statement.
The move represents a stark repositioning for the German automotive giant, which since the 1990s has attempted to boost sales volume with a range of lower-cost vehicles.
While the old strategy attempted to broaden access to the brand and widen its net of potential buyers, Mercedes-Benz now claims low-volume and high cost cars will deliver higher returns.
Many manufacturers have hiked prices and axed entry level models over the past two years, amid stock shortages, slowed semiconductor production, and supply chain disruptions.
William Davis has written for Drive since July 2020, covering news and current affairs in the automotive industry. He has maintained a primary focus on industry trends, autonomous technology, electric vehicle regulations, and local environmental policy. As the newest addition to the Drive team, William was brought onboard for his attention to detail, writing skills, and strong work ethic. Despite writing for a diverse range of outlets – including the Australian Financial Review, Robb Report, and Property Observer – since completing his media degree at Macquarie University, William has always had a passion for cars.