Mercedes Moving To More Expensive Cars Because The Middle Class Is Going Away
The global chip shortage turned the automotive business model on its head, rewarding per-vehicle profit margins when volume simply became impossible. Perhaps the automaker best suited to adapt was Mercedes-Benz, whose CEO told investors at an event in Monaco that’ll be the order of business from here on out. Instead of focusing on volume, Mercedes will amplify the already tall profit margins on its most expensive models to secure its future—and make more exclusive ones.
Mercedes CEO Ola Kallenius told investors at its Capital Markets Day on May 19 that he would increase sales of Mercedes’ most expensive models by 60 percent by 2026, and boost margins to around 14 percent, according to Bloomberg. The entry point for Mercedes-Benz buyers in the past would not be the entry point for future buyers, he specifically said.