Mercedes Needs An Entry Level Baby Benz Now More Than Ever
Just two short years ago, Mercedes said they didn’t want a baby Benz any more as they were focused on upscale models.
Remember the weird year we had in 2021? Ultra luxury items sold like crazy. Bentley had a record sales year, by a sizable percentage. Same with Lamborghini. Although the trend was weird, with the nation gripped by the stranglehold of Covid 19, a few things contributed to this.
For car brands, people in the showrooms are key. And with no one out and about during a pandemic, dealerships and car companies had to get creative. With the squeeze also came the juice – luxury cars were getting much better margins than entry level cars. Add to that a supply shortage of… everything, and the available electronics went to the high end models. This meant less cars were available to buy, so nothing stayed in the showroom. It was gone as soon as it came off the transport truck.
Mercedes even touted this as a deliberate move, stating they were moving the brand up-scale. So long baby Benz. But now it turns out that Mercedes is having a re-think. Now that supplies are back to normal, the artificial market drive for cars has dwindled significantly. Big money cars now sit. And a volume seller is needed to fill the gaps, according to Motor1. Hello baby Benz.
Why the call to action? Mercedes had a down year for 2023, with about 4500 fewer cars sold than the year prior. This is concerning on a few levels. Mainly, the chip shortage mostly solved, and additionally, supply chain issues cleared up for the most part. While those should help sales, things that hurt are higher than usual interest rates, and a waning EV market. Mercedes has realized too many eggs were in the high-end egg basket.
When you need to push numbers, even if they are smaller, volume sellers are the key. Motor1 noted that profits were a primary goal before. Whether or not those were reached, that mission statement now sounds something like “sales growth.”
Traditionally the E-class and the tried and true baby Benz C-class have been the ones to get out the showroom door the quickest. With crossover popularity, the GLC and GLE will need to participate in that sales growth too. Expect hybrids to be popping up soon in this segment. Not only because Mercedes designed architecture to allow platforms to be ICE, EV or hybrid, but because hybrids have more buyer confidence right now relative to battery electric.
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Photos courtesy of Mercedes
