Go back to Page 1: Mercedes-Benz targets the high-end of luxury

Less of the Low 

This is all lovely for those swimming in cash, you say, but what about normal Mercedes cars? 

Mercedes says its ‘Core Luxury’ segment is still the strongest part of its portfolio and delivers the highest sales volumes – this refers to its ‘big’ cars underpinned by the MRA platform, including the C-Class and E-Class and variants. 

BMW in comparison, already has plenty of High End products from BMW M and Rolls-Royce, is focusing on this segment with its ‘New Klasse’ push for midsized EVs.

Mercedes will continue to proliferate tech from the High End cars into the Core models to boost their desirability. One way is electric tech: Mercedes has announced the next-gen electric tech consisting of a new-gen battery pack and axial flux motor developed within the Daimler Group from the ground up, as shown in the Vision AMG concept. It will also bring electric versions of these cars to market sooner. We’ll see more of this in the next-gen W214 E-Class that debuts in 2023. 

Not to blow our own trumpet, but these themes are exactly what we pointed out in our review of the newest C-Class that just launched in Singapore, which features many of the same things that make the S-Class an eye-opening tech powerhouse on wheels. 

But it also marks a notable shift in Mercedes’ strategy in the past decade, where it and arch-rival BMW have duelled for the top sales position in both the global and local market. The shift now is to profitable growth, with the implication being that raw sales numbers don’t matter as much. 

From the mid-2010s on, Mercedes made big sales headway through a comprehensive series of cars in the entry-level luxury segment, basically the less expensive Mercs underpinned by the MFA platform that debuted in 2015 with the CLA four-door coupe. 

The model variants have risen (by body style) to as seven currently – the A-Class hatch, 

A-Class sedan, B-Class, CLA, CLA Shooting Brake, GLA, and GLB – but Mercedes now says it will prune this branch of the model tree down to just four cars. Our bet? Goodbye CLA, CLA Shooting Brake, and B-Class. 

Why? The obvious reason is that margins for these cars are lower than the Core and Top End.

While these cars are typically the best selling by numbers, small/mainstream(ish) cars like this also face heavy competition from Audi, BMW, and even Volvo and Volkswagen in Singapore. 

Our guess is that electrifying these models for efficiency gains is also fraught with compromise, and not very profitable in the near term. There’s a reason that the first wave of luxury German EVs have all been big cars – the Mercedes-Benz EQA is still the only luxury small EV SUV on sale here in Singapore, and it’s not exactly affordable.

In reflection, something like an EQS makes far more financial sense for its maker. Not only ticks the box for unavoidable green/electric requirements, but wows customers enough for the bigger price tag to be justified – and to deliver Mercedes a bigger profit on the sale.

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