Mercedes-Benz saw its average selling price go from €51,000 in 2019 to €71,500 in the first quarter of 2022, a rise of 40%, its chief financial officer proudly told an audience of bankers in Monaco last Thursday.
The plan within Mercedes, the audience was told, was to push that selling price up even more. “We’re not going to compete with volume makers,” said CEO Ola Källenius. “We’re a modern luxury company.”
The message to the bankers was: tell your customers to buy our shares, because profits are only going to go north. The message to Mercedes customers was interpreted as: don’t expect any more cheap or discounted cars.
Like many car makers, Mercedes has been banging the drum of value over volume for a while now, and the executive team used the Monaco event to sketch out what that will mean for the German brand.
Illustrated by slide decks liberally sprinkled with diamonds, the company compared 2019 figures with those of rosy-looking 2026.
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By that date, it predicts that its share of ‘entry’ premium cars in the A-Class category will fall by around a quarter to settle at an estimated 500,000, while top-end luxury cars such as those from Mercedes-AMG, the Mercedes G-Class, Mercedes-Maybachs and the priciest EQ electric cars will increase their shares by 60% versus competitors. The share of “core luxury” comprising cars like the Mercedes-Benz C-Class and Mercedes-Benz E-Class will be broadly similar.
Illustrating just how much money it’s prepared to spend to focus on top-end models, Mercedes said it will apportion 75% of R&D spend to top and core, with just 25% going to entry.
However, the starting price of the Mercedes A-Class (if it survives as one of the four-of-seven compact models today) is going up, the bankers were told.
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