September 26, 2023


Where Innovation Lives

Is Mercedes-Benz Shedding Its Prestige as a Luxury Car or truck Brand name?

5 min read


Mercedes-Benz is a single of lots of excellent items in the automotive landscape. It is defined by its innovations, resiliency as a brand, and the overall performance of its cars, particularly in racing. It also has the bragging legal rights of obtaining a founder who invented the to start with auto. Some declare, having said that, about Mercedes-Benz losing its prestige as a luxurious car manufacturer more than the years.

A small documentary from CNBC in 2021 describes why Mercedes may perhaps already be shedding its shine. The components attributing to this, incorporate:

1. Good quality Regulate Troubles

1 of its contentions is that the manufacturer has endured high quality regulate difficulties over the a long time as it struggled with its electronic components and its predisposition to slice creation charges. We would like to add that this however transpires based mostly on the recurrent recalls it has introduced in the earlier few of many years.

2. Dilution of Exclusivity Because of to Intense Market place Enlargement

One more is that above the yrs, the endeavours of the corporation ended up predominantly concentrated on boosting the quantity of its products and solutions to seize a lot more sector share. With that, Merc has been attractive youthful consumers by earning fewer expensive vehicles with lesser luxurious characteristics. On the other hand, this kind of a tactic was not normally thriving as with the scenario of the C-Course Sport Coupe in 2002, which unsuccessful miserably in the current market resulting to its discontinuation in 2006. It ought to be observed that the exact point took place when the model dipped into the luxurious pickup truck segment through the small-lived Mercedes-Benz X-Course. These and the presence of so many autos in its lineup tend to dilute its exclusivity as a manufacturer, way too.

3. SUVs Don’t Inspire the Same Stage of Interest as Its Cars and trucks

In addition, the supply mentioned that its SUVs don’t inspire the exact degree of curiosity as its passenger automobiles. This may 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 makes often have products that are pretty much alike style-wise such as the Mercedes GLE, BMW X5, BMW X3, Audi Q5, and Lexus RX. Insert the point that Merc has initially held back from introducing its hottest SUVs from Europe into the US like in the case of the GLC so it missed out on its big demand there.

4. Getting rid of Floor in the US Luxurious Vehicle Market

CNBC even more cited Benz lagging in the third place in phrases of the quantity of luxury automobiles marketed in the U.S. Citing 2020 details, BMW was on the prime of the list marketing 278.9K models, Lexus on next with 275K marketed, and Merc on the third place with 274.9K revenue. Nonetheless, it really should be recalled that Mercedes stays the leading-offering luxury vehicle manufacturer in the planet.

5. Drop in Revenue

Next, the presenter took into account a time in 2019 when Daimler, the then-father or mother of Mercedes, saw its earnings tumble by $5 billion because of to its involvement in the Dieselgate scandal and electrification R&D. If its EV investments are unsuccessful to generate favorable effects in the a long time to come, it could threaten the confidence of its shareholders.

6. Robust Levels of competition in the EV Market

Speaking of electrification, the model has to wrestle amid powerful competitors in the EV current market. Just one of which is Tesla, and the entry of many other brands in the phase, especially the much less expensive Chinese EVs.

Centered on McKinsey’s Electric powered Car or truck Index, Tesla retains a 16% world wide market share EV. Mercedes is not even in the leading 10 listing of the knowledge as of 2019. Its conventional rival, BMW, built it but most entries arrived from Chinese EV makers. When it will come to China, which has the major need for EV these days, Merc also has to enjoy out for its neighborhood EV brands.

7. The Tesla Threat

An attention-grabbing simple fact that was pointed out by the video was the tendency of the major German luxury automakers (Mercedes, BMW, and Audi who very own a 60% slice of the Chinese market place) to fall their total market place share advantage any time Tesla opens up a new retail outlet in a locale. From the appears to be of it, Tesla is aiming to maximize its exposure by opening up more global dealerships in the many years to come, consequently, if the development proceeds, it will be one hell of a trip for the German luxury brands.

On top of that, Merc usually takes a lot more time to develop its EV styles owing to its superior common and initiatives to make it ideal the to start with time, which are not just a poor point. Even so, competition like Tesla are transferring quicker and additional adventurous when it comes to exploring tech that other automakers are reluctant to adopt. The point out-of-the-artwork tech is commonly what attracts more youthful purchasers to the American brand.

Nonetheless, Tesla is far from safe in the American current market mainly because EVs continue to comprise a compact proportion of whole motor vehicle product sales in the US.

Our Just take

We agree with most of the arguments introduced by CNBC about Mercedes-Benz getting rid of its prestige in excess of the yrs due to the fact several of them have been manifesting within the brand now. Then yet again, it is truly worth mentioning that the info offered from quite a few sources ended up two or 3 many years from the existing, and since then, Mercedes has produced big leaps in its marketing, notably in its EV advancement.

So much, the German automaker is having fun with success in its Mercedes-Benz GLC SUV with 51,805 units sold in 2021, and 16,910 models bought in the very first quarter of 2022 and is about to roll out its next-technology model for the range in dealerships.

And finally, the a few-pointed star marque just produced huge strides in its electrification through the triumphant demonstration of the Mercedes-Benz Vision EQXX, which not too long ago exhibited an true array of 747 miles on a solitary charge. The explained automobile serves as a preview of what the brand has in retail store for its EV models heading forward.


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