Mercedes-Benz's strong Q1 profits benefit from smart pricing strategies
Mercedes-Benz announced strong financial results in the first quarter of 2022 that has been boosted by pricing and focus on top-end vehicles and premium vans along with the company's ongoing cost structure. These steps have lifted sales of Mercedes-Benz Cars to 16.4 per cent and of Mercedes-Benz Vans by 12.6 per cent. Mercedes-Benz also informed that the pandemic, shortage of semiconductors and the going war between Russia and Ukraine continue to impact the business.
Mercedes-Benz shared that despite strong demand, the overall sales fell by 10 per cent compared to last year's first quarter. The premium carmaker sold 4,87,008 vehicles against 5,38,869 vehicles in quarter one of 2021. However, the price and improved product mix helped to register positive revenues despite the markets being volatile. Deliveries of top-end vehicles, namely Mercedes-Maybach, Mercedes-AMG, G-Class, S-Class, GLS and EQS, increased by 5 per cent to 78,000 vehicles during the same period. Top-end vehicles, currently, account for 16 per cent of the overall volume of the luxury automaker. Sales of Mercedes-Benz Cars hybrid and electric models also grew by 19 per cent during the quarter to 74,000 vehicles.
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Chief Financial Officer of Mercedes-Benz Group AG Harald Wilhelm said in these current scenarios resilience and pricing power are crucial. “Our sharpened focus on desirable top-end and electric vehicles, combined with ongoing cost discipline, allowed us to deliver strong earnings despite numerous headwinds," said Wilhelm. Mercedes-Benz is also focusing on scaling up the production of electric vehicles and accelerating software development, he added.
Mercedes-Benz said it expects supply constraints related to semiconductors and other industrial products and the Covid-19 pandemic to impact business for the remainder of the year. The company added it will continue to monitor the supply chain risks closely to react flexibly if needed.