- Profitable growth: Reshaped product portfolio with focus on
Top-End Luxury, Core Luxury and Entry Luxury; more than 75% of
investments dedicated to Top-End and Core Luxury segments
- Top-End Luxury: Share of Top-End vehicle sales projected to
rise by around 60% by 2026; product offensive from Maybach, AMG and
G-Class with dedicated EV-characteristics and greater
individualisation; “MYTHOS Series” of highly-exclusive collectible
cars
- Core Luxury: 2023 E-Class aims to set new benchmark in digital
customer experience; development of additional electric vehicle
specifically for Chinese market on EVA2 platform
- Entry Luxury: Focus on only four model variants with elevated
positioning compared to today while new entrance point will be
redefined; products will leverage VISION EQXX EV-technology and new
MB.OS software
- Brand management: Iconic communication and selected luxury
collaborations; rapid expansion of direct sales and dedicated
“Brand Experience Centers” for Top-End vehicles
- Financial performance: Mercedes-Benz redesigned and
repositioned to achieve goal of structurally higher profitability
and reduced volatility; strategic margin ambition as pure-play
company in the luxury segment raised to approximately 14% in
favourable market conditions by mid of the decade; Product mix and
pricing power as key drivers
Mercedes-Benz (stock exchange code: MBG) today hosted a strategy
update on the Côte d’Azur. This ‘Economics of Desire’ event
outlined the future of Mercedes-Benz as a dedicated pure-play
luxury car company and provided details of its strategic course.
The company will focus even further on luxury, elevate its product
portfolio, accelerate its path to a fully electric future and
target structurally higher profitability.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220519005378/en/
At the very top end of the product
portfolio is an exclusive edition of the Mercedes-Maybach S-Class,
known as the Limited Edition Maybach by Virgil Abloh. (Photo:
Business Wire)
Mercedes-Benz will recalibrate its product portfolio, allocating
more than 75% of its investments to develop products for the most
profitable market segments. As part of this sharpened strategy,
Mercedes-Benz aims to grow the sales share of its Top-End vehicles
by around 60% by 2026 versus 2019 and intends to achieve higher
quality growth and a further significant increase in profitability
and resilience, striving for an operating margin target of
approximately 14% by mid of the decade in favorable market
conditions. This greater focus on the top end of the market should
enable the company to deliver a strong financial result even under
more challenging market conditions. The company’s strategic
decision to become fully electric by 2030 – wherever market
conditions allow – and the ambition to become CO2-neutral by 2039
are integral elements to enhance the connection between luxury and
sustainability.
“What has always been the core of our brand is now also the core
of our strategy: the luxury segment. We are further sharpening the
focus of our business model and product portfolio in order to
maximize the potential of Mercedes-Benz even in challenging
conditions. At the heart of that is our goal to build the world’s
most desirable cars,” says Ola Källenius, Chairman of the Board of
Management of Mercedes-Benz Group AG.
Enhanced and elevated product mix as pure-play company
– future focus on three product categories
The increased focus on luxury follows rising customer demand in
this segment. In 2021, the Mercedes-Benz S-Class posted an increase
of 40%, while Mercedes-AMG and Mercedes-Maybach likewise set new
records. Mercedes-Benz intends to use its brand’s power even more
effectively in a growing luxury market. Going forward, the company
anticipates disproportionate growth in the Top-End vehicle segment
and will use this as an opportunity to reconfigure the structure of
its product portfolio.
In future, Mercedes-Benz will concentrate on three product
categories: Top-End Luxury, Core Luxury and Entry Luxury. In the
Top-End Luxury segment the product portfolio
encompasses:
- all vehicles from the Mercedes-AMG and Mercedes-Maybach
brands
- the Top-End models from Mercedes-EQ, including the EQS and the
EQS SUV
- the Mercedes-Benz S-Class and G-Class models as well as the
full-size luxury GLS
- limited edition models and exclusive collaboration
vehicles
On the evening of May 19, the Vision AMG will be unveiled, and
will offer an insight into the all-electric future of the
performance luxury brand Mercedes-AMG - based on the dedicated
AMG.EA architecture for fully electric AMG models. All of the
Vision AMG’s drivetrain components are developed entirely from
scratch: not only the platform itself, but also the dedicated
high-performance high-voltage battery and the revolutionary drive
technology. The powerful heart of the Vision AMG is its innovative
Axial Flux Motor developed by Mercedes-Benz’ wholly-owned
subsidiary YASA. With its compact and lightweight design it
delivers substantially more power than conventional electric
motors.
Mercedes-Maybach is expanding its product offering in the
Top-End segment, led by the Mercedes-Maybach EQS SUV, which is
scheduled for market launch next year. In addition, the preview of
a Mercedes-Maybach SL reveals more about the future opportunities
of the company’s most exclusive brand.
Electrification across the board is also evident in the
legendary “G”. The all-electric G-Class will be the first
Mercedes-Benz vehicle to feature advanced battery cell chemistry
from Sila Nanotechnologies as an option. Furthermore, steps to
expand the G product family are being evaluated.
Mercedes-Benz will also expand with limited editions and
exclusive collaboration vehicles. At the very top end of the
product portfolio is an exclusive edition of the Mercedes-Maybach
S-Class, known as the Limited Edition Maybach by Virgil Abloh.
Conceived and designed by the designer Virgil Abloh before his
unexpected and untimely passing, these cars will be produced to
celebrate the extraordinary creativity and talent. Only 150 of
these strictly limited edition vehicles will be built, making them
a highly desirable collectible. Mercedes-Benz is planning further
exclusive collector editions under the Maybach brand. Mercedes-Benz
also announced a new program of ultra-exclusive collector cars, to
be known as the “MYTHOS Series”. These cars – produced in selected
numbers – will be made available exclusively to the most dedicated
enthusiasts and collectors of Mercedes-Benz. Every car of the
MYTHOS series will aim to earn its place alongside the brand’s
historical pantheon of greats.
“Most luxury companies build their portfolio on the basis of one
or two true icons. Mercedes-Benz has the good fortune to have
multiple iconic products and brands at the upper end of its
portfolio – such as the S-Class, the SL, the G as well as the AMG
and Maybach brands. We see great potential here to expand our
Top-End portfolio with even more fascinating products for our
customers,” commented Ola Källenius on the new portfolio
strategy.
Core Luxury stands for the core of the brand, currently
encompassing the Mercedes-Benz C-Class and E-Class model ranges and
their derivatives, which typically have the highest sales volumes.
With the Core luxury segment, the company plans to go electric on
an accelerated timescale, leveraging the EVA2 platform (EQE, EQE
SUV) and then MB.EA architecture. The new E-Class comes to market
next year and will point the way forward for the segment. This
product category will also grow through the addition of a further
model based on the EVA2 platform and designed specifically for the
China market.
The new entrance point of the Mercedes-Benz portfolio is being
redefined with the next generation of vehicles. In the Entry
Luxury segment, Mercedes-Benz will reduce the number of model
variants from seven to four while significantly elevating the
technological substance of these products. For instance, the new
MB.OS (Mercedes-Benz Operating System) will be launched in 2024
with the next compact MMA platform. The first product on the new
platform, will showcase the way forward. These changes will
reposition Mercedes-Benz in the segment, honing in more precisely
on the wishes of discerning customers.
Redesigning and repositioning Mercedes-Benz for
structurally higher profitability
In October 2020, Mercedes-Benz provided new financial objectives
as part of its new strategic course. These featured an absolute
reduction of fixed costs, a substantial improvement in pricing
discipline and targeted stronger profitability in all economic
weather conditions. Since then, Mercedes-Benz has moved fast to
deploy its strategy and it has delivered financial results that
have significantly exceeded its targets. While aided by some
favorable market conditions, these results have demonstrated the
effectiveness of the new strategic path and the earnings power of
the Mercedes-Benz brand. This sets the course to further leverage
positive development of average selling prices across all
segments.
With the progression and elevation of its luxury strategy,
Mercedes-Benz is now targeting a further increase in structural
profitability, striving for an operating margin of approximately
14% by mid of the decade in favorable market conditions. The
company aims for margins of approximately 8% in very unfavorable,
approximately 10% in unfavorable and approximately 12% in fair
market conditions. Unforeseeable geopolitical or macro-economic
shifts and raw material premises obviously cannot be part of this
target grid, but Mercedes-Benz is redesigning the company to ensure
stronger profitability even in a tougher environment. The focus
continues to be on strong cash generation and significant cash
returns to shareholders.
Luxury customer experience – seamless access to all
channels and with all senses
The customer is the focal point. This has always been rule
number one for Mercedes-Benz and it will gain even greater emphasis
going forward. The purchasing experience and the customer journey
play a central role in the luxury segment. With this in mind, the
company has established new marketing and sales channels – online
and offline – and has planned further measures which offer a
seamless customer journey. Excellent ease-of-use pairs with high
experiential values at every touchpoint – starting with digital
communication. The company assumes that by 2025, more than 80% of
sales in Europe will be direct sales.
Bundling equipment packages simplifies configuration
and reduces cost
When configuring a vehicle in future, the customer will be able
to choose from a number of different equipment packages based on
preference and regional demands. This simplifies and speeds up
online configuration and also leads to a faster and higher level of
availability for the customer as well as a significant complexity
reduction for the company. The grouping of option packages is
expected to also have a positive effect on residual values as a
higher level of equipment is also available for base variants.
In parallel, Mercedes-Benz is optimizing the settings at
physical sales locations. Prime examples of this include the AMG
Store in Dubai, which opened its doors in December 2021, and the
Maybach Atelier in Shanghai, which will open in a few months.
Personal customer interaction remains the backbone of the brand’s
presence and sales. The real-life experience is crucial for
Mercedes-Benz customers, providing the opportunity for them to see
a new vehicle for themselves, to experience it with all their
senses and to drive it.
Strategic pillars provide clear orientation
Mercedes-Benz aims to build the world’s most desirable cars. At
the end of 2020, the company presented its refined strategy, laying
the groundwork for profitable growth in the luxury segment.
Sustainability, Integrity and Diversity form the foundation of this
strategy.
Further information on Mercedes-Benz Group AG is available at:
group-media.mercedes-benz.com and
group.mercedes-benz.com
Forward-looking statements:
This document contains forward-looking statements that reflect
our current views about future events. The words “anticipate,”
“assume,” “believe,” “estimate,” “expect,” “intend,” “may,” ”can,”
“could,” “plan,” “project,” “should” and similar expressions are
used to identify forward-looking statements. These statements are
subject to many risks and uncertainties, including an adverse
development of global economic conditions, in particular a decline
of demand in our most important markets; a deterioration of our
refinancing possibilities on the credit and financial markets;
events of force majeure including natural disasters, pandemics,
acts of terrorism, political unrest, armed conflicts, industrial
accidents and their effects on our sales, purchasing, production or
financial services activities; changes in currency exchange rates,
customs and foreign trade provisions; a shift in consumer
preferences towards smaller, lower-margin vehicles; a possible lack
of acceptance of our products or services which limits our ability
to achieve prices and adequately utilize our production capacities;
price increases for fuel or raw materials; disruption of production
due to shortages of materials, labour strikes or supplier
insolvencies; a decline in resale prices of used vehicles; the
effective implementation of cost-reduction and
efficiency-optimization measures; the business outlook for
companies in which we hold a significant equity interest; the
successful implementation of strategic cooperations and joint
ventures; changes in laws, regulations and government policies,
particularly those relating to vehicle emissions, fuel economy and
safety; the resolution of pending governmental investigations or of
investigations requested by governments and the outcome of pending
or threatened future legal proceedings; and other risks and
uncertainties, some of which are described under the heading “Risk
and Opportunity Report” in the current Annual Report or in the
current Interim Report. If any of these risks and uncertainties
materializes or if the assumptions underlying any of our
forward-looking statements prove to be incorrect, the actual
results may be materially different from those we express or imply
by such statements. We do not intend or assume any obligation to
update these forward-looking statements since they are based solely
on the circumstances at the date of publication.
Mercedes-Benz Group at a glance
Mercedes-Benz Group AG is one of the world's most successful
automotive companies. With Mercedes-Benz AG, the Group is one of
the leading global suppliers of premium and luxury cars and vans.
Mercedes-Benz Mobility AG offers financing, leasing, car
subscription and car rental, fleet management, digital services for
charging and payment, insurance brokerage, as well as innovative
mobility services. The company founders, Gottlieb Daimler and Carl
Benz, made history by inventing the automobile in 1886. As a
pioneer of automotive engineering, Mercedes-Benz sees shaping the
future of mobility in a safe and sustainable way as both a
motivation and obligation. The company's focus therefore remains on
innovative and green technologies as well as on safe and superior
vehicles that both captivate and inspire. Mercedes-Benz continues
to invest systematically in the development of efficient
powertrains and sets the course for an all-electric future: The
brand with the three-pointed star pursues the goal to go
all-electric, where market conditions allow. Shifting from
electric-first to electric-only, the world’s pre-eminent luxury car
company is accelerating toward an emissions-free and
software-driven future. The company's efforts are also focused on
the intelligent connectivity of its vehicles, autonomous driving
and new mobility concepts as Mercedes-Benz regards it as its
aspiration and obligation to live up to its responsibility to
society and the environment. Mercedes-Benz sells its vehicles and
services in nearly every country of the world and has production
facilities in Europe, North and Latin America, Asia and Africa. In
addition to Mercedes-Benz, the world's most valuable luxury
automotive brand (source: Interbrand study, 20 Oct. 2021),
Mercedes-AMG, Mercedes-Maybach, Mercedes-EQ and Mercedes me as well
as the brands of Mercedes-Benz Mobility: Mercedes-Benz Bank,
Mercedes-Benz Financial Services and Athlon. The company is listed
on the Frankfurt and Stuttgart stock exchanges (ticker symbol MBG).
In 2021, the Group had a workforce of around 172,000 and sold 2.3
million vehicles. Group revenues amounted to €168.0 billion and
Group EBIT to €29.1 billion.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220519005378/en/
Tobias Just, phone: +49 160 868 7568,
tobias.just@mercedes-benz.com Kristin Stegen, phone: +49 151 5860
4425, kristin.stegen@mercedes-benz.com Edward Taylor, phone: +49
176 309 41776, edward.taylor@mercedes-benz.com Han Tjan, phone: +1
917 667 2381, han.tjan@mercedes-benz.com Andrea Berg, phone: +1 917
667 2391, andrea.a.berg@mercedes-benz.com
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