Mercedes CEO hints at some entry-level models facing axe. Here's why 

  • CEO Ola Kallenius does not want Mercedes to be a volume producer and has hinted at more premium vehicles in coming times.
File photo of Mercedes-Benz A-Class.
File photo of Mercedes-Benz A-Class.

The very real challenge for luxury and super luxury automotive brands across the globe often is how best to balance the need to be aspirational while still selling impressive volumes. While taking pride in being rather exclusive has always determined the course ahead, profits remain the major driving force and often requires a substantial number of units to be sold. Mercedes, in particular, has been leading the luxury space in many markets in terms of sales even if its CEO remains determined to not let the brand be a competitor among volume producers. As such, Ola Kallenius has also hinted some entry-level models from the brand could get the axe in coming times.

While electric vehicles from the brand is the major focus area, Mercedes has also been looking at its more premium offerings to add winds to its sails. “We will talk more next week, but it’s not our goal to be a competitor of the volume producers. That’s not what the Mercedes-Benz brand stands for," Kallenius reportedly said at the Financial Times Future of the Car summit, adding that Mercedes is ‘looking up rather than down.’

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Kallenius hasn't revealed which particular models may be dropped from the lineup but Mercedes confirmed earlier this year that it is removing the A-Class from its US lineup. The reason outlined for the decision was a move to streamline product strategy which may also mean that crossovers and SUVs at the starting price spectrum will be the focus rather than entry-level sedans. Here in India, the A-Class Limousine was launched in early 2022 with Mercedes-Benz India looking at bringing more first-time luxury car buyers to within its fold. But even here, it is the E-Class LWB, GLC and GLE that bolster Mercedes and not the A-Class Limousine. In fact, it is the 2022 C-Class that is attracting a major chunk of young and first-time luxury car buyers.

Navigating Indian and other emerging markets may be trickier than doing business in more mature luxury car markets like the US, western European countries as well as China. In India in particular, the luxury car space remains significantly small compared to the overall industry and this is also what allows for a whole lot of potential for growth. Can this potential be realized through entry-level models or are more premium vehicles still the preferred lot? Time and Mercedes strategy will reveal the answer to just that.

First Published Date: 10 May 2022, 10:55 AM IST
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