The electrification race started some time ago, and almost all manufacturers today have their own strategies and timetables to achieve full electrification of their range within the next few years.
On the side of Mercedes, it is the EQ range which takes on the role of electric, and the models are starting to be more and more numerous in the catalog. From the “small” EQA to the flagship EQS, via the EQE and other EQBs, almost all segments are now equipped with an electric car at Mercedes. Even the iconic G-Class will be entitled to its EQG electric version in 2024.
However, this is only part of the revolution that awaits Mercedes in the years to come, a revolution that will not only concern the range.
An undeniable upgrade
It’s no longer a secret, Mercedes has already announced it for a while: there will be some cleaning in the range . The starred firm wants to refocus on higher-end and more profitable models, especially in the current economic climate with the crisis in raw materials and components.
The recent Class A and Class B restylings could thus be the swan song for this range, at least in the form that we know them. In the future, these models should become 100% electric and thus move upmarket, in every sense of the word, including in terms of price. Less volume, more profitability, that seems to be Mercedes’ strategy going forward.
Mercedes will reduce part of its range to focus on other, more luxurious models. Thus, the manufacturer will divide its range into three sub-segments: Luxury (compacts that will remain in the catalog), Core Luxury (which will include models such as the E-Class, EQE, etc.) Top-End Luxury (S-Class, EQE, and other high-end models).
A trio that will not, however, benefit from the same treatment: the second and third segments will receive more than 75% of the new investments, the objective being to increase the sales of these segments by more than 60%.
In what way ? By giving more importance to models badged Mercedes-Maybach and Mercedes-AMG, with more models and more variations. At the same time, the G-Class could even become a range in its own right, with more luxurious, more 4×4-type models and, of course, also 100% electric.
Mercedes’ objective, common to many other premium and even non-premium brands, is to increase its profitability with a target of 14% operating margin to be achieved by 2025.
Fewer dealers and more agencies
By 2025, Mercedes plans to cut 10% of its global dealer network, which totals 6,500 points of sale. In Germany, the reduction in the distribution network will even reach 15 to 20% by 2028.
At the same time, the manufacturer wants to move to an agency model in Europe, in which it is the manufacturer who owns the stock and invoices customers directly. In other words, it will no longer be the dealer who “buys” cars from manufacturers to resell them, but Mercedes who will sell their cars directly to customers.
By 2025, 80% of sales on the Old Continent must be made via this system, in a total of 20 countries compared to 5 today. The idea is to reduce distribution costs, but also to better control car prices. Mercedes also aims to reach 25% of online sales by 2025.
The dealers will continue to exist, but with different roles, such as providing maintenance services or even taking care of deliveries to customers. Everything concerning the negotiation and sales part will be centralized by Mercedes.
This is a streamlining process that will simplify the ordering process, directly control sales prices and prevent agencies from tying up capital in their car inventory.