December 5, 2022


Born to perform

Is Mercedes-Benz Losing Its Prestige as a Luxury Car Brand?

5 min read


Mercedes-Benz is a person of numerous superior items in the automotive landscape. It is described by its innovations, resiliency as a model, and the effectiveness of its automobiles, primarily in racing. It also has the bragging rights of getting a founder who invented the 1st vehicle. Some claim, nevertheless, about Mercedes-Benz shedding its prestige as a luxury automobile manufacturer around the decades.

A brief documentary from CNBC in 2021 describes why Mercedes may well by now be getting rid of its shine. The components attributing to this, consist of:

1. Top quality Control Difficulties

One of its contentions is that the manufacturer has suffered good quality manage difficulties about the yrs as it struggled with its digital factors and its predisposition to slice manufacturing expenditures. We would like to add that this nonetheless comes about dependent on the frequent recollects it has introduced in the previous few of years.

2. Dilution of Exclusivity Owing to Aggressive Market Expansion

Another is that in excess of the several years, the attempts of the firm had been largely concentrated on boosting the quantity of its items to capture additional market place share. With that, Merc has been engaging young potential buyers by generating fewer pricey automobiles with lesser luxury features. Even so, such a technique was not constantly successful as with the situation of the C-Class Sport Coupe in 2002, which unsuccessful miserably in the industry ensuing to its discontinuation in 2006. It need to be observed that the identical matter transpired when the manufacturer dipped into the luxurious pickup truck segment via the short-lived Mercedes-Benz X-Course. These and the existence of so numerous motor vehicles in its lineup tend to dilute its exclusivity as a brand name, also.

3. SUVs Do not Encourage the Similar Amount of Fascination as Its Cars and trucks

Furthermore, the resource stated that its SUVs don’t encourage the very same level of interest as its passenger vehicles. This may perhaps be attributed to the existence of formidable rivals in the sector, like BMW, Audi, and Lexus, not to point out that some of the claimed brands at times have goods that are almost alike layout-smart such as the Mercedes GLE, BMW X5, BMW X3, Audi Q5, and Lexus RX. Include the simple fact that Merc has initially held again from introducing its best SUVs from Europe into the US like in the case of the GLC so it missed out on its large need there.

4. Dropping Ground in the US Luxurious Auto Market place

CNBC additional cited Benz lagging in the third situation in conditions of the number of luxury motor vehicles bought in the U.S. Citing 2020 info, BMW was on the prime of the record offering 278.9K models, Lexus on next with 275K marketed, and Merc on the 3rd place with 274.9K sales. Even so, it should really be recalled that Mercedes stays the best-promoting luxury automobile model in the environment.

5. Drop in Earnings

Following, the presenter took into account a time in 2019 when Daimler, the then-parent of Mercedes, observed its profits tumble by $5 billion thanks to its involvement in the Dieselgate scandal and electrification R&D. If its EV investments fail to make favorable success in the yrs to occur, it could threaten the assurance of its shareholders.

6. Potent Competitiveness in the EV Marketplace

Speaking of electrification, the brand has to battle amid potent level of competition in the EV market. Just one of which is Tesla, and the entry of numerous other brand names in the segment, notably the more cost-effective Chinese EVs.

Based mostly on McKinsey’s Electric Car Index, Tesla holds a 16% worldwide current market share EV. Mercedes is not even in the best 10 record of the info as of 2019. Its common rival, BMW, created it but most entries arrived from Chinese EV makers. When it arrives to China, which has the major need for EV presently, Merc also has to view out for its neighborhood EV makes.

7. The Tesla Menace

An exciting actuality that was pointed out by the video was the inclination of the leading German luxurious automakers (Mercedes, BMW, and Audi who possess a 60% slice of the Chinese current market) to fall their overall sector share edge anytime Tesla opens up a new retail store in a location. From the appears to be like of it, Tesla is aiming to optimize its exposure by opening up extra worldwide dealerships in the yrs to come, hence, if the pattern continues, it will be just one hell of a experience for the German luxurious manufacturers.

Additionally, Merc requires extra time to produce its EV designs because of to its substantial standard and endeavours to make it right the 1st time, which are not exactly a terrible detail. Having said that, opponents like Tesla are shifting more rapidly and much more adventurous when it arrives to discovering tech that other automakers are hesitant to undertake. The condition-of-the-artwork tech is generally what appeals to youthful buyers to the American manufacturer.

Nonetheless, Tesla is considerably from safe in the American current market simply because EVs continue to comprise a compact proportion of full automobile profits in the US.

Our Take

We agree with most of the arguments offered by CNBC about Mercedes-Benz shedding its prestige above the a long time because numerous of them have been manifesting within just the model now. Then yet again, it’s worth mentioning that the data supplied from quite a few sources ended up two or a few yrs from the present, and considering the fact that then, Mercedes has made massive leaps in its marketing, significantly in its EV enhancement.

So considerably, the German automaker is having fun with good results in its Mercedes-Benz GLC SUV with 51,805 models bought in 2021, and 16,910 units marketed in the to start with quarter of 2022 and is about to roll out its up coming-era product for the variety in dealerships.

Finally, the three-pointed star marque just designed large strides in its electrification via the triumphant demonstration of the Mercedes-Benz Vision EQXX, which not long ago displayed an precise vary of 747 miles on a one cost. The explained auto serves as a preview of what the manufacturer has in retailer for its EV units going ahead.


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