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Mercedes axes cheaper models in bid for luxury brand status


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Mercedes-Benz will axe three cheaper models and spend the vast majority of its cash on developing top-of-the-range cars in a bid to convince investors that it ranks alongside luxury goods groups such as France’s LVMH.

The focus on more expensive products would help Mercedes achieve profit margins of between 13 and 15 per cent by the middle of the decade, chief executive Ola Källenius said, assuming market conditions were “favourable” at the time.

The group would reduce the number of so-called compact cars it offered from seven to four, he added, and “redefine the entry point of the Mercedes-Benz brand”.

 While Källenius refused to name the models that would be phased out, people close to the company have suggested that Mercedes will eventually axe its A and B-class ranges. The cheapest versions retail at €30,000.

Mercedes will focus instead on the performance-focused AMG brand, the off-road G-Class, and luxury marque Maybach, all of which will offer electric models in the next few years, as well as the electric EQ range and the recently relaunched S-Class saloon.

https://www.ft.com/content/dd290f3c-f08d-45a1-a64a-16f66b6f1e1e

 

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Turbocharged

 

They're selling this Ullenhaut SL for 125m euros. No decimal points missed here. One of 2 in the world. They're keeping the other one.

Built for the 1956 racing season, but they pulled out of racing that year.

c6f419d8-9f6c-4f21-a121-71d06aaa64a9_w94

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Supercharged
59 minutes ago, Karoon said:

 

They're selling this Ullenhaut SL for 125m euros. No decimal points missed here. One of 2 in the world. They're keeping the other one.

Built for the 1956 racing season, but they pulled out of racing that year.

c6f419d8-9f6c-4f21-a121-71d06aaa64a9_w94

I had the matchbox car of this... was my favourite one of all 😂

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Turbocharged

https://www.bloomberg.com/news/articles/2022-05-19/mercedes-to-unveil-jade-axe-strategy-in-luxury-car-profit-race

  • To cut number of entry-level vehicles to four from seven
  • More than 75% of investment aimed at higher-end vehicles

Mercedes-Benz AG will cut back its entry-level suite of cars as part of a strategic overhaul that will channel more than three-quarters of the carmaker’s investment to its higher-end vehicles.

Mercedes unveiled its plans to major investors on Thursday, placing the drive for greater profitability on its so-called Top End Vehicle segment, home to the iconic G-Wagon, the flagship S-Class sedan and the high-performance AMG division. 

“We are further sharpening the focus of our business model and product portfolio in order to maximize the potential of Mercedes-Benz even in challenging conditions,” Chief Executive Officer Ola Kallenius said in a statement. “At the heart of that is our goal to build the world’s most desirable cars.”

The strategy builds on a trend that pushed profitability to record levels during the semiconductor crunch, but the jury is out on whether it would be as effective if supply constraints ease and automakers return to chasing market share. While Mercedes sold 10% fewer vehicles in the first quarter compared to a year ago, profit surged 20%.

Mercedes sees top-end vehicle sales increasing by 60% by 2026, a jump that would help push its operating margin to around 14% by mid-decade, the company said. But the carmaker acknowledged that headwinds including raw-material prices, supply-chain bottlenecks and broader economic risks pose a threat to the targets.

Variants for entry level models like the A-Class will be cut to four from seven, the company said. Mercedes currently produces numerous entry level variants, including estate and sports utility vehicle models.

Mercedes will launch its next car operating system on an entry-level compact car and brand them as flagships for affluent, tech-savvy buyers.

“We are not chasing volume,” Mercedes-Benz Chief Financial Officer Harald Wilhelm said on a call with reporters. “This is entry luxury.”

Read: VW Revives Dormant Scout Brand With EV Models for US Growth

Mercedes is also starting a Mythos brand of collectable vehicles aimed at marketing exclusivity. Mercedes gave a teaser of the first Mythos car -- a speedster based on the new Mercedes-AMG SL -- and suggested it could become a rival to cars such as Ferrari NV’s limited-edition Icona series.

The automaker will unveil a prototype car based on its future electric AMG platform later Thursday. Famous for its roaring V8 engines, the division faces a challenge in convincing performance-car enthusiasts to switch to all-electric models.

“We see great potential here to expand our top-end portfolio with even more fascinating products for our customers,” Kallenius said.

After the successful separation of Mercedes and its sprawling truck division, management is intensifying efforts to transform the inventor of the automobile to compete with Tesla Inc. The company aims to have battery-powered models in all its segments this year, a staging post for its ambition to sell only electric cars by 2030. 

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I hope I can afford a A45 AMG soon. Then I renew the COE.

Is the last of its own liao.

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Turbocharged

Different thinking and strategies from different management. Won't be surprised a decade later they will want to bring back more entry level variants for whatsoever reasons at that point of time. 

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Supersonic
9 minutes ago, Lethalstrike said:

Different thinking and strategies from different management. Won't be surprised a decade later they will want to bring back more entry level variants for whatsoever reasons at that point of time. 

When they can't find enough luxury buyers.... 

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Twincharged
1 hour ago, mersaylee said:

Just donch sell to taxi company as fleet car can oredi... @RadX sure agree one 😁

Simi teksi? Mersilly branding is so strong that even when bus, lorry, hearse, rubbish truck stick big big 3-pointed star in front ppl still buy n prepared to wait 4-6 mths for an entry level mersilly w high markup$

 

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Supersonic
1 minute ago, Soya said:

Simi teksi? Mersilly branding is so strong that even when bus, lorry, hearse, rubbish truck stick big big 3-pointed star in front ppl still buy n prepared to wait 4-6 mths for an entry level mersilly w high markup$

 

Compact cars lah deh 😁

But C n CLA not compact meh? 🤔

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Supersonic

Mercedes-Benz will axe three cheaper models? Means no more entry level merc liao?

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Twincharged
2 minutes ago, mersaylee said:

Compact cars lah deh 😁

But C n CLA not compact meh? 🤔

In all fairness, I gotta say the C & CLA possess quite a bit of showroom appeal w it's bling bling interiors 

Personally not a fan of bling but I can see how it appeals to some 

 

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Supersonic
1 hour ago, kobayashiGT said:

I hope I can afford a A45 AMG soon. Then I renew the COE.

Is the last of its own liao.

wah boss.. mcf pay very good 

need storeman bo?

😬

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