Mercedes-Benz sets a target of 14% sales profit margin, optimizes product lineup and tests direct sales

In the past year, Mercedes-Benz has devoted all its efforts to electrification.Many new models will debut, including the AMG brand will also be "electrically shocked" for the first time.On May 19, Mercedes-Benz held a strategic upgrade conference on the French Riviera, giving more specific plans for brand development.Mercedes-Benz will further focus on luxury and optimize its product lineup.

It is understood that Mercedes-Benz will put more resources into "high-end luxury" models, namely Mercedes-Benz S-Class, AMG, Maybach, and "core luxury", namely Mercedes-Benz C-Class, E-Class, and, of course, electric vehicles.The reduction of entry-level luxury models, such as Mercedes-Benz A-Class, B-Class, etc., is planned to be reduced from 7 models to 4 models.

In addition, Mercedes-Benz will invest more than 75% of its investment in developing the most profitable segment products, and plans to achieve a profit margin of about 14% in 2025.In the past 2021, the sales profit margin of Mercedes-Benz's passenger car and light commercial vehicle business segment was 12.7%.In terms of electrification, Mercedes-Benz plans to achieve full electric power by 2030 and carbon neutrality of its new car lineup by 2039.

Focus on high-end luxury downsizing entry-level models

In response to market changes, Mercedes-Benz has further focused on luxury, focusing on three major product matrices, including "high-end luxury", "core luxury" and "new generation luxury".First of all, Mercedes-Benz will gather the most profitable high-end luxury segment, which is also an important guarantee for Mercedes-Benz to achieve its profit margin target.To this end, Mercedes-Benz will reconstruct the matrix of high-end luxury products, including AMG brand, Maybach brand, high-end models of EQ (EQS, EQS SUV), S-Class, G-Class, GLS and limited edition models.

In addition, the AMG brand is also "electrically shocked" for the first time - the world premiere of the Vision AMG concept car, and the follow-up will launch a pure electric model based on the exclusive AMG.EA pure electric architecture platform.The Maybach brand will also launch the Maybach EQS pure electric SUV next year, which will become the most high-end pure electric model in the market. The high-profile G-class model will also launch a pure electric version in the future.

The "core luxury" is the segment with the largest sales volume of Mercedes-Benz, namely the Mercedes-Benz C-Class and E-Class families, which will accelerate the electrification process. Relying on the EVA2 pure electric platform to launch EQE and EQE SUV models, the follow-up will also rely on the new MB .EA model architecture platform to launch more new models.In addition, a new generation of E-class cars will be launched next year, which will trigger a new round of BBA competition for medium and large luxury cars.Mercedes-Benz also plans to rely on the EVA2 platform to build a new model specially designed for the Chinese market.

The "new generation luxury" is the entry-level model. Mercedes-Benz will reduce investment and reduce the number of models. It plans to reduce the number of models from 7 to 4. The models with poor sales performance are expected to be eliminated, such as GLA and GLB.The reserved models will enhance the technological level of the products. In the future, new products will be launched based on the MMA platform, which will be equipped with the new MB.OS Mercedes-Benz operating system in 2024.

Improve sales profit margins and test the waters of direct sales

The optimization and adjustment of products is an effort made by Mercedes-Benz to improve its structural profitability.According to the plan, Mercedes-Benz plans to achieve a profit margin target of about 14% in 2025.The company aims to achieve a profit margin of approximately 8% in very difficult market conditions, approximately 10% in more difficult market conditions and approximately 12% in normal market conditions.

In the past 2021, Mercedes-Benz's annual turnover was 168 billion euros (about 1.19 trillion yuan), a year-on-year increase of 9%; pre-tax profit was 29.1 billion euros (about 206.8 billion yuan), a year-on-year increase of 340% , the full-year adjusted sales profit margin reached 12.7%.According to this trend, it is not very difficult for Mercedes-Benz to achieve the 14% target, especially overseas markets are gradually less affected by the epidemic.

In addition, in terms of sales model, Mercedes-Benz is also testing the waters, establishing new online and offline marketing and sales channels, including trying a direct sales model, which has been launched in some markets, such as Australia.In China, Mercedes-Benz is still mainly sold by authorized dealers.Perhaps soon, Mercedes-Benz will also make changes.And Mercedes-Benz also expects that by 2025, more than 80% of its sales in the European market will come from direct sales.

In general, this Mercedes-Benz Cote d'Azur strategy release, the entire strategic goal is still very clear, all strategies revolve around a 14% profit margin, so focus on high-end luxury and electrification in products.As one of the leaders of luxury brands, Mercedes-Benz took the lead in making strategic adjustments. It should also see the future trend of the luxury car market. Perhaps entry-level luxury cars will gradually withdraw from the stage of history!