Is Mercedes-Benz Losing Its Prestige as a Luxury Car Brand?

Mercedes-Benz is one particular of numerous very good things in the automotive landscape. It is outlined by its improvements, resiliency as a manufacturer, and the overall performance of its vehicles, especially in racing. It also has the bragging 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 automobile brand in excess of the years.

A shorter documentary from CNBC in 2021 points out why Mercedes could already be getting rid of its glow. The variables attributing to this, involve:

1. Excellent Manage Problems

1 of its contentions is that the brand has endured high-quality regulate issues more than the several years as it struggled with its digital parts and its predisposition to slash output prices. We would like to increase that this nevertheless takes place based mostly on the recurrent recalls it has declared in the past few of several years.

2. Dilution of Exclusivity Because of to Intense Marketplace Expansion

One more is that above the a long time, the initiatives of the corporation have been generally focused on boosting the volume of its solutions to seize more marketplace share. With that, Merc has been attractive young prospective buyers by creating less pricey autos with lesser luxurious capabilities. On the other hand, this sort of a approach was not constantly effective as with the circumstance of the C-Course Activity Coupe in 2002, which failed miserably in the sector resulting to its discontinuation in 2006. It should really be observed that the exact detail occurred when the brand dipped into the luxurious pickup truck segment via the short-lived Mercedes-Benz X-Course. These and the existence of so a lot of autos in its lineup are inclined to dilute its exclusivity as a brand, as well.

3. SUVs Don’t Inspire the Exact Amount of Interest as Its Automobiles

Furthermore, the supply stated that its SUVs do not encourage the similar degree of fascination as its passenger cars. This might be attributed to the existence of formidable rivals in the sector, including BMW, Audi, and Lexus, not to mention that some of the reported brand names at times have solutions that are practically alike style and design-wise these types of as the Mercedes GLE, BMW X5, BMW X3, Audi Q5, and Lexus RX. Increase the truth that Merc has to begin with held back from introducing its hottest SUVs from Europe into the US like in the circumstance of the GLC so it missed out on its large demand there.

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

CNBC even further cited Benz lagging in the 3rd situation in conditions of the amount of luxury vehicles sold in the U.S. Citing 2020 knowledge, BMW was on the prime of the record marketing 278.9K units, Lexus on second with 275K offered, and Merc on the 3rd place with 274.9K product sales. However, it really should be recalled that Mercedes remains the top rated-promoting luxurious motor vehicle manufacturer in the environment.

5. Slide in Income

Upcoming, the presenter took into account a time in 2019 when Daimler, the then-father or mother of Mercedes, noticed its profits slide by $5 billion owing to its involvement in the Dieselgate scandal and electrification R&D. If its EV investments fall short to create favorable success in the yrs to occur, it could threaten the confidence of its shareholders.

6. Sturdy Competitiveness in the EV Sector

Talking of electrification, the brand name has to struggle amid powerful competition in the EV industry. A person of which is Tesla, and the entry of many other brands in the section, specially the less costly Chinese EVs.

Based on McKinsey’s Electric Motor vehicle Index, Tesla retains a 16% worldwide current market share EV. Mercedes is not even in the top rated 10 listing of the data as of 2019. Its common rival, BMW, produced it but most entries came from Chinese EV makers. When it comes to China, which has the largest desire for EV at present, Merc also has to view out for its area EV brand names.

7. The Tesla Menace

An interesting fact that was pointed out by the video was the tendency of the major German luxury automakers (Mercedes, BMW, and Audi who personal a 60% slice of the Chinese market) to drop their general sector share advantage any time Tesla opens up a new keep in a location. From the seems to be of it, Tesla is aiming to improve its publicity by opening up a lot more global dealerships in the several years to come, consequently, if the pattern proceeds, it will be one particular hell of a journey for the German luxury makes.

Moreover, Merc normally takes more time to produce its EV styles owing to its large common and endeavours to make it right the 1st time, which are not precisely a lousy detail. Even so, competitors like Tesla are moving faster and additional adventurous when it comes to exploring tech that other automakers are unwilling to undertake. The point out-of-the-artwork tech is generally what attracts young buyers to the American brand name.

Nonetheless, Tesla is much from protected in the American current market mainly because EVs still comprise a little percentage of total vehicle gross sales in the US.

Our Get

We concur with most of the arguments presented by CNBC about Mercedes-Benz dropping its status in excess of the decades for the reason that various of them have been manifesting within just the brand presently. Then again, it’s truly worth mentioning that the facts available from various resources had been two or three years from the existing, and given that then, Mercedes has created major leaps in its advertising, significantly in its EV development.

So much, the German automaker is experiencing good results in its Mercedes-Benz GLC SUV with 51,805 models offered in 2021, and 16,910 models sold in the initially quarter of 2022 and is about to roll out its up coming-generation design for the variety in dealerships.

Finally, the a few-pointed star marque just manufactured major strides in its electrification by using the triumphant demonstration of the Mercedes-Benz Vision EQXX, which not too long ago exhibited an true range of 747 miles on a single cost. The said auto serves as a preview of what the brand has in store for its EV models going forward.