Mercedes-Benz Targets Top-End Segments, Growing BEV Share for Vans Business
May 16 2023 - 8:23AM
Dow Jones News
By David Sachs
Mercedes-Benz Group's new strategy for its vans business will
focus on the most profitable, top-end segments and boost
electrification amid cost-cutting plans, it said on Tuesday.
The German auto maker will adapt the luxury strategy typical of
its cars business to its private van customers. The company said it
will more intensely target premium segments to generate profitable
growth by concentrating on high-margin regions, channels, products
and industries.
For its private van business, the company will hone its focus on
China, it said. For its commercial van segment, Mercedes-Benz is
pursuing what it calls a "premium" strategy and is well positioned
for significant growth in the U.S., it said.
The company will also build its software-based revenue by
expanding its customizable, in-van digital offerings, it said.
The vans business is undergoing a cost-savings initiative with
the goal of cutting fixed costs by 20% by 2025 compared with 2019
levels and achieving adjusted return on sales in the double digits
until 2030, Mercedes-Benz said. In 2022, Mercedes-Benz reported an
adjusted return on sales of 11.2% for its vans division.
The strategy includes transitioning to direct sales while
streamlining and digitizing various processes. The company aims to
cut production costs by reducing the hours it takes to produce a
vehicle by 25%, in part by optimizing energy use and incorporating
more digital technology to increase efficiency. That target is set
for 2025 and is weighed against 2019 figures, the company said.
As for its electrification targets, the car maker said it wants
20% of all vans sold by 2026 to be fully electric, with that share
growing to more than 50% by 2030. Fully-electric vans accounted for
around 4% of all van sales in 2022, according to the company's
annual report.
Write to David Sachs at david.sachs@wsj.com
(END) Dow Jones Newswires
May 16, 2023 09:08 ET (13:08 GMT)
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