Mercedes-Benz wants to improve its already high profitability and expand its profit margin, which is why taking advantage of its transition to electric mobility, it will completely restructure its offer, which will be divided into three subfamilies: Entry Luxury, Core Luxury, and Top-End Luxury. Its compact range will be one of the most affected by the new corporate strategy.
Currently made up of seven models (Class A, Class A Sedan, CLA, CLA Shooting Brake, Class B, GLA, GLB), in the short term it will be made up of four. Ola Kallenius, CEO of the company, has confirmed during the presentation of the financial results for 2022 that Mercedes-Benz will continue to bet on compact cars despite its new approach.
“But we will focus on the models that we believe are the most successful globally. At the end of the year, the brand will present a preview of the new compact range, which will be based on the MMA platform. This architecture will allow Mercedes-Benz to offer gasoline, diesel, plug-in hybrid, and electric engines without distinction.
The Entry Luxury family will mean a lower percentage of sales than the current compact range; In addition, the company will raise the prices of its smaller models to reach an overall profit margin of 14%. Therefore, Mercedes-Benz will power its midsize and large vehicles, as well as the Mercedes-AMG and Mercedes-Maybach sub-brands.
The new compact range of Mercedes-Benz will consist of Class A, CLA, GLA, and GLB
Previous information indicates that the German firm will eliminate the Class A Sedan, CLA Shooting Brake, and Class B. The disappearance of the Class A Sedan is explained by its overlapping with the CLA saloon, while Class B will be the victim of the fall from grace of the minivans, being indirectly replaced by the Class T/EQT van.
Mercedes-Benz also wants to do without family bodies, too dependent on the European market, which will condemn the CLA Shooting Brake. Thus, only Class A, CLA, GLA, and GLB will receive a new generation. The first to arrive will be the CLA, which will debut in 2024.
In 2022, the “entry-level” models accounted for 595,916 units of the total 2.45 million cars sold by the German group globally; that is, 29%. This translated into growth of 5%, a figure lower than the 8% achieved by the Core Luxury family and the 9% of the Top-End Luxury family.