Mercedes’ goal is to fuel in an electrically luxurious way with ‘desire’

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BERLIN – The Mercedes-Benz French Cote d’Azur outlines a new strategy inspired by “creating aspiration” through a lack of strategy day, where it showcases its luxury models to analysts, investors and selected customers.

The German carmaker will dedicate 75% of its investment to top-selling vehicles and the best-selling portion of the “Core Luxury” C-Class and E-Class models, it said on Thursday, reducing the number of entry-level models.

Chief executive Ola Kaellenius says the semiconductor shortage has hit the industry over the past two years, allowing Mercedes-Benz to test high prices on customers, which will keep it even if the deficit is reduced.

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“Restrictions (on semiconductor supply) will be lifted at some stage, but we will abide by the discipline,” he said.

Mercedes-Benz says it aims to sell electric cars exclusively in 2030 where market conditions allow. The amount of EVs sold in the second half of the decade will accelerate, Calenias said, while more models have been rolled out.

“We want to put ourselves in a position where we can serve all our markets electronically. If it’s 2030 plus ‘x’ … it’s definitely not bigger than ‘5’, “Kelenias said.

Previously, Mercedes-Benz raised its margin target to 14% by 2025, from 10% or more, predicting favorable conditions.

It expects its top-end model sales share to grow 60% to 17-18% by 2026 from the 2019 level, with the Chinese market proposing the highest growth potential.

Despite hitting a 16.4% margin in its car segment in the first quarter of 2022, the margin target for 2025 was ambitious because the carmaker needed to finance its electrification strategy, said Chief Financial Officer Harold Wilhelm.

“We need to be realistic about the cost of converting to battery-electric vehicles,” Wilhelm said. (Reporting by Victoria Waldersey, Editing by Miranda Murray, Rachel Moore and Alexander Smith)

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