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

Mercedes-Benz is just one of a lot of superior things in the automotive landscape. It is outlined by its innovations, resiliency as a brand, and the general performance of its autos, specifically in racing. It also has the bragging rights of getting a founder who invented the initially car. Some claim, nevertheless, about Mercedes-Benz losing its status as a luxurious car or truck brand more than the yrs.

A limited documentary from CNBC in 2021 clarifies why Mercedes might now be getting rid of its glow. The elements attributing to this, contain:

1. Quality Regulate Issues

1 of its contentions is that the brand name has experienced quality handle concerns in excess of the many years as it struggled with its digital elements and its predisposition to slice creation expenditures. We would like to include that this nonetheless takes place dependent on the frequent remembers it has declared in the earlier few of yrs.

2. Dilution of Exclusivity Because of to Aggressive Marketplace Expansion

One more is that over the several years, the endeavours of the business were mainly focused on boosting the volume of its goods to seize more marketplace share. With that, Merc has been attractive younger prospective buyers by making less pricey motor vehicles with lesser luxurious capabilities. On the other hand, these a technique was not usually prosperous as with the case of the C-Course Sport Coupe in 2002, which failed miserably in the industry ensuing to its discontinuation in 2006. It need to be mentioned that the exact point transpired when the brand dipped into the luxury pickup truck segment via the quick-lived Mercedes-Benz X-Class. These and the presence of so many autos in its lineup tend to dilute its exclusivity as a brand name, as well.

3. SUVs Really do not Inspire the Similar Amount of Fascination as Its Autos

Furthermore, the resource said that its SUVs don’t inspire the similar degree of interest as its passenger cars. This might be attributed to the existence of formidable rivals in the marketplace, including BMW, Audi, and Lexus, not to point out that some of the said brand names at times have goods that are pretty much alike design-sensible these as the Mercedes GLE, BMW X5, BMW X3, Audi Q5, and Lexus RX. Include the simple fact that Merc has initially held again from introducing its most popular SUVs from Europe into the US like in the circumstance of the GLC so it missed out on its enormous desire there.

4. Dropping Ground in the US Luxury Vehicle Sector

CNBC even further cited Benz lagging in the 3rd posture in conditions of the amount of luxury autos sold in the U.S. Citing 2020 data, BMW was on the best of the checklist marketing 278.9K units, Lexus on second with 275K marketed, and Merc on the 3rd spot with 274.9K product sales. Yet, it really should be recalled that Mercedes continues to be the top rated-offering luxury vehicle brand name in the entire world.

5. Fall in Earnings

Upcoming, the presenter took into account a time in 2019 when Daimler, the then-dad or mum of Mercedes, observed its gains slide by $5 billion owing to its involvement in the Dieselgate scandal and electrification R&D. If its EV investments are unsuccessful to deliver favorable final results in the several years to occur, it could threaten the self-assurance of its shareholders.

6. Powerful Opposition in the EV Market

Speaking of electrification, the manufacturer has to wrestle amid powerful competitors in the EV market. One particular of which is Tesla, and the entry of a lot of other brands in the section, especially the more cost-effective Chinese EVs.

Centered on McKinsey’s Electrical Motor vehicle Index, Tesla holds a 16% worldwide industry share EV. Mercedes is not even in the top rated 10 checklist of the facts as of 2019. Its standard rival, BMW, produced it but most entries arrived from Chinese EV makers. When it will come to China, which has the most significant need for EV nowadays, Merc also has to observe out for its nearby EV manufacturers.

7. The Tesla Risk

An fascinating simple fact that was pointed out by the video clip was the inclination of the prime German luxury automakers (Mercedes, BMW, and Audi who have a 60% slice of the Chinese market) to drop their general industry share benefit when Tesla opens up a new retail outlet in a spot. From the looks of it, Tesla is aiming to increase its publicity by opening up additional global dealerships in the years to come, hence, if the trend proceeds, it will be a single hell of a experience for the German luxury manufacturers.

On top of that, Merc takes additional time to acquire its EV designs owing to its superior conventional and endeavours to make it ideal the very first time, which are not accurately a terrible detail. Nonetheless, competition like Tesla are shifting faster and a lot more adventurous when it arrives to exploring tech that other automakers are unwilling to undertake. The condition-of-the-artwork tech is commonly what appeals to youthful consumers to the American manufacturer.

Nonetheless, Tesla is considerably from secure in the American sector for the reason that EVs even now comprise a small share of complete auto revenue in the US.

Our Just take

We concur with most of the arguments presented by CNBC about Mercedes-Benz losing its status more than the a long time simply because quite a few of them have been manifesting within just the brand name currently. Then all over again, it is worth mentioning that the knowledge supplied from a number of sources had been two or three several years from the present, and considering that then, Mercedes has built huge leaps in its advertising, particularly in its EV advancement.

So far, the German automaker is taking pleasure in success in its Mercedes-Benz GLC SUV with 51,805 models marketed in 2021, and 16,910 units marketed in the initially quarter of 2022 and is about to roll out its next-era model for the range in dealerships.

Finally, the a few-pointed star marque just manufactured major strides in its electrification through the triumphant demonstration of the Mercedes-Benz Eyesight EQXX, which lately exhibited an real array of 747 miles on a single charge. The claimed vehicle serves as a preview of what the model has in retail outlet for its EV models likely forward.