Hot! Mercedes-Benz, What's Next?

[Design FIRST]

MERCEDES IS REORIENTING ITSELF – WITH A VIEW TO CHINA
Mercedes-Benz is at a turning point. CEO Ola Källenius has therefore announced an ambitious program designed to make the company more efficient and redefine its position on the global market. This will significantly reduce costs per vehicle, while simultaneously reinventing the brand. Instead of being a pure luxury car manufacturer, Mercedes will in future primarily stand for "exceptional" – for vehicles that are more than status symbols and consciously stand out from the crowd.

The Swede, Källenius, is under considerable pressure. He is currently being accused of several missteps: inappropriate model choices, questionable design , too few cylinders in key model series, overcapacity at the plants, and unplanned additional expenditures. These burdens have limited the company's flexibility – and explain why the CEO must now take particularly decisive countermeasures.

The strategic focus is clearly on China . This is not only Mercedes' largest sales market, but also the pacesetter for future developments. Chinese buyers value innovation, design, and digital connectivity – features that Mercedes is increasingly integrating into its vehicles. Thus, the "special" is not sought in pomp or excess, but in a blend of exclusive technology , striking design, and customized services.

The realignment is even more evident in production . The company states: " We are becoming even more Chinese. " The goal is ambitious: In the medium to long term, up to 100 percent of the so-called factor costs for locally manufactured models should be incurred directly in the People's Republic. This is not yet the case today, as a number of components continue to be imported from the West. Costs per vehicle can quickly reach several thousand euros. But these flows of goods could dry up over time – with the result that value creation will increasingly be diverted from Europe and relocated to China.

For Mercedes, this step means that the desired cost reduction can best be achieved where economies of scale and a strong supplier network converge – and that is in China. At the same time, the company is securing its access to important future technologies such as batteries and electronic components, which are often more expensive and difficult to obtain in Europe.

With this dual focus—cost discipline and a new brand promise—Mercedes aims to embark on a fresh start in the coming years. The company no longer aims to be just the classic luxury brand from Stuttgart , but a global provider offering something special: vehicles that impress with their technology, quality, and uniqueness. A mission that the company is willing and must achieve.

But this new planned path carries risks. The more Mercedes engages with China, the greater its dependence on a market that is not always economically and politically predictable. For Källenius, it is nevertheless the logical step: Only if Mercedes simultaneously becomes more efficient and recharges its brand promise will the company have a chance of asserting itself in global competition. This "special" quality will thus become the new core of Mercedes – and China a crucial partner on this path.

Mercedes richtet sich neu aus - mit den Blick nach China

Mercedes richtet sich neu aus: Statt Luxus soll das „Besondere“ im Mittelpunkt stehen – mit stärkerem Fokus auf China, trotz Kritik an Källenius.

mbpassion.de

Sadly, this may be the SOLE route leading to possible salvation for German-branded manufacturers. I can hardly be sanguine regarding the near-to-mid term prospects of the German economy, (still) the EU's largest consumer market. And the U.S. market has become so unpredictable that it has becoming very far from a "safe bet". Does M-B brand equity carry as much weight as was the case in the past ? Sub-par management and a political environment in Germany/EU that is, for the most part, beyond M-B's control has led to this dilemma.

 

[kiki voinea]

MERCEDES IS REORIENTING ITSELF – WITH A VIEW TO CHINA
Mercedes-Benz is at a turning point. CEO Ola Källenius has therefore announced an ambitious program designed to make the company more efficient and redefine its position on the global market. This will significantly reduce costs per vehicle, while simultaneously reinventing the brand. Instead of being a pure luxury car manufacturer, Mercedes will in future primarily stand for "exceptional" – for vehicles that are more than status symbols and consciously stand out from the crowd.

The Swede, Källenius, is under considerable pressure. He is currently being accused of several missteps: inappropriate model choices, questionable design , too few cylinders in key model series, overcapacity at the plants, and unplanned additional expenditures. These burdens have limited the company's flexibility – and explain why the CEO must now take particularly decisive countermeasures.

The strategic focus is clearly on China . This is not only Mercedes' largest sales market, but also the pacesetter for future developments. Chinese buyers value innovation, design, and digital connectivity – features that Mercedes is increasingly integrating into its vehicles. Thus, the "special" is not sought in pomp or excess, but in a blend of exclusive technology , striking design, and customized services.

The realignment is even more evident in production . The company states: " We are becoming even more Chinese. " The goal is ambitious: In the medium to long term, up to 100 percent of the so-called factor costs for locally manufactured models should be incurred directly in the People's Republic. This is not yet the case today, as a number of components continue to be imported from the West. Costs per vehicle can quickly reach several thousand euros. But these flows of goods could dry up over time – with the result that value creation will increasingly be diverted from Europe and relocated to China.

For Mercedes, this step means that the desired cost reduction can best be achieved where economies of scale and a strong supplier network converge – and that is in China. At the same time, the company is securing its access to important future technologies such as batteries and electronic components, which are often more expensive and difficult to obtain in Europe.

With this dual focus—cost discipline and a new brand promise—Mercedes aims to embark on a fresh start in the coming years. The company no longer aims to be just the classic luxury brand from Stuttgart , but a global provider offering something special: vehicles that impress with their technology, quality, and uniqueness. A mission that the company is willing and must achieve.

But this new planned path carries risks. The more Mercedes engages with China, the greater its dependence on a market that is not always economically and politically predictable. For Källenius, it is nevertheless the logical step: Only if Mercedes simultaneously becomes more efficient and recharges its brand promise will the company have a chance of asserting itself in global competition. This "special" quality will thus become the new core of Mercedes – and China a crucial partner on this path.

Mercedes richtet sich neu aus - mit den Blick nach China

Mercedes richtet sich neu aus: Statt Luxus soll das „Besondere“ im Mittelpunkt stehen – mit stärkerem Fokus auf China, trotz Kritik an Källenius.

mbpassion.de

But , how is making MBs more "chinese focused" better?

Even if they would sell only in China , is dumb .

Why make MB buyers even more enraged with chinese-designed and focused cars ?

And the most important thing: How can you make them affordable ?

In the past 2 years ( if I am not wrong ; data based ) , chinese market has shifted a little to it's manufacturers because they make competitive quality cars with way better pricing.

I know branding is a thing , but , all german manufacturers have LOST market share in the past 2-3 years.

Ola should retire before he will bring MB to it's death

 

[Merc1]

I still say build what you made you famous in the first place and it won't matter which market it is and the rest will take care of itself.

"Instead of being a pure luxury car manufacturer, Mercedes will in future primarily stand for "exceptional" – for vehicles that are more than status symbols and consciously stand out from the crowd."

I guess I really don't understand this. Isn't that what a Mercedes was back in the day anyways?

M

 

[Sunny]

Sadly, this may be the SOLE route leading to possible salvation for German-branded manufacturers

But how though? Chinese market is set on BEVs. Also known as German car industry's achilles heels. To even stand a chance to compete they should have moved on BEVs 10 years before they did. But they didn't. And now it is too late. And it is not just a matter of catching up. The issue is, when it comes to BEVs, any idea of superior German engineering was blown wide open by the plethora of shitty BEVs they launched in China in the last 5 years. So if you are in China, if you buy a German BEV now, you are just overpaying for some past glory. Like Jaguar elsewhere.

Yes, there will be a shrinking market for ICEV in China that they can try and milk.

All just MHO.

 

[Merc1]

China is clearly it not the answer. Returning to their roots, in both ICE and EV is the key IMO.

M

 

[Design FIRST]

But , how is making MBs more "chinese focused" better?

China has not only become the largest automobile market, but also a highly discerning one.

Even if they would sell only in China , is dumb .

It is quite possible, if not even probable, that the global acceptance of vehicles manufactured in China will expand quickly. Anecdotal: I recently was able to have a look at an Xpeng G6. Must say, I was impressed by what I saw.

Why make MB buyers even more enraged with chinese-designed and focused cars ?

Arguably a "political thing". Or a thing anchored in rapidly evaporating "old school" brand loyalties. Not to mention shifting consumer demographics.

And the most important thing: How can you make them affordable ?

Yes, A significant issue indeed.

In the past 2 years ( if I am not wrong ; data based ) , chinese market has shifted a little to it's manufacturers because they make competitive quality cars with way better pricing.

Yes. Although I suspect that it has probably shifted more than "a little".

I know branding is a thing , but , all german manufacturers have LOST market share in the past 2-3 years.

Ola should retire before he will bring MB to it's death

Ola certainly may be "the wrong man for the job". It is also my opinion that he has been granted too many lifelines.

All my own opinion as well.

 

[Merc1]

But how though? Chinese market is set on BEVs. Also known as German car industry's achilles heels. To even stand a chance to compete they should have moved on BEVs 10 years before they did. But they didn't. And now it is too late. And it is not just a matter of catching up. The issue is, when it comes to BEVs, any idea of superior German engineering was blown wide open by the plethora of shitty BEVs they launched in China in the last 5 years. So if you are in China, if you buy a German BEV now, you are just overpaying for some past glory. Like Jaguar elsewhere.

Yes, there will be a shrinking market for ICEV in China that they can try and milk.

All just MHO.

I agree with most of this, but moving to just EVs 10 years ago was not an option for them. Too many other markets were not ready. Being legacy companies ensures they're going to have to straddle the EV/ICE fence for a while worldwide. This is why I say companies like Lotus, Cadillac, etc who have been suffering for years or don't have big presence in a lot of markets can go EV and not risk much. It's a boon for them and every startup. Lucid and Rivian are only going to grow at someone' expense. I think they need to go back to their roots and the appeal will be there no matter the market. Cars that display what the premium is for the moment you open the door, like Mercedes' back in the day.

M

 

[Sunny]

I agree with most of this, but moving to just EVs 10 years ago was not an option for them.

I agree. It is an impossible choice for an established company. But also why we see disruption in many industries.

 

[AbsoluteUnit]

I think China is treated too much as a boogie man entity. It's not a problem to try and win them over. Because honestly, winning them over is the best toughest challenge given how rapidly they iterate.

Moving away from "Luxury" is a curious choice for Mercedes.
I'm of the opinion that Mercedes should be expensive. But they should offer a lot for the money instead of nickel and diming buyers for every last option.

Making cars that feel special is certainly a way to do it. But as long as the interior and build quality is up to snuff.

 

[Swissbob]

The Problem in China is the nationalism which you can see now also on the car market.

I guess If you buy a Chinese car you’re getting also a better social score.

Therefore some people might be afraid to buy a western car.

I think Mercedes Benz shouldn’t concentrate on the Chinese market anymore.

If their western cars work in china, fine, but they shouldn’t build cars for china and then try to sell them worldwide.

 

[Design FIRST]

I think China is treated too much as a boogie man entity. It's not a problem to try and win them over. Because honestly, winning them over is the best toughest challenge given how rapidly they iterate.

YES ! Certainly a lofty task at hand. But one that will pay large dividends should it be successful. In terms of confidence in light of just how good Chinese vehicles are becoming. And in monetary terms, as high volume sales potential most certainly, if anywhere, exists in China. Of course, provided that economic conditions there do not sour too excessively or too rapidly.

Moving away from "Luxury" is a curious choice for Mercedes.

Paramount is QUALITY; a return to "Engineering to a standard", innovative, purposeful tech and good, enduring design. Lavish hedonism is not really a prime M-B characteristic. Perhaps best would be leaving that to very limited volume, built to order only, bespoke manufacturing sub-brands such as Maybach and/or "Mythos".

I'm of the opinion that Mercedes should be expensive.

The very best of value for the money. Even if it is a considerable amount of money.

Making cars that feel special is certainly a way to do it.

"Feeling special" in the manner that cars such as the W116, W126, R/C107, R129 and even the far more pedestrian W115 and W123 "felt special"..."felt distinctively, unmistakably MERCEDES-BENZ.".

 

[AbsoluteUnit]

YES ! Certainly a lofty task at hand. But one that will pay large dividends should it be successful. In terms of confidence in light of just how good Chinese vehicles are becoming. And in monetary terms, as high volume sales potential most certainly, if anywhere, exists in China. Of course, provided that economic conditions there do not sour too excessively or too rapidly.



Paramount is QUALITY; a return to "Engineering to a standard", innovative, purposeful tech and good, enduring design. Lavish hedonism is not really a prime M-B characteristic. Perhaps best would be leaving that to very limited volume, built to order only, bespoke manufacturing sub-brands such as Maybach and/or "Mythos".


The very best of value for the money. Even if it is a considerable amount of money.


"Feeling special" in the manner that cars such as the W116, W126, R/C107, R129 and even the far more pedestrian W115 and W123 "felt special"..."felt distinctively, unmistakably MERCEDES-BENZ.".

Yes I agree. Hedonistic vehicles and excess aren't really the Mercedes way. Being overbuilt and over engineered on the other hand is the Mercedes way. That's not to say Mercedes should go completely austere with interior design. It should be nicely designed, but not overdone, and most importantly, built to a high quality standard.

 

[Swissbob]

I think China is treated too much as a boogie man entity. It's not a problem to try and win them over. Because honestly, winning them over is the best toughest challenge given how rapidly they iterate.

Moving away from "Luxury" is a curious choice for Mercedes.
I'm of the opinion that Mercedes should be expensive. But they should offer a lot for the money instead of nickel and diming buyers for every last option.

Making cars that feel special is certainly a way to do it. But as long as the interior and build quality is up to snuff.

China is a thing of the past. This ship has sailed.

In all other points I agree with you.

Currently there’s only one car which really feels like a Mercedes Benz should, it’s the G.

 

[Design FIRST]

Currently there’s only one car which really feels like a Mercedes Benz should, it’s the G.

IMHO, that legendary, characteristic exclusivity that defined M-B vehicles for decades began to evaporate with the presentation of competitors such as the E34 and later the E39 BMW 5ers. These BMWs, even more than the also extremely formidable 7 series cars of the era due to higher sales volumes, ushered a redefinition of the "brand status hierarchy". They were cars that made the contemporary M-B E-Class models "a bit less extraordinary". Certainly, the R129 SL was an exceptional M-B. But as for the sedans and estates, no longer so much IMHO. Not with the E34, E39, E32 and E38 in the game. And then, Audi came into play with the first gen A8-although it has lost an immense amount of glitter over the course of the years following "Dieselgate".

 

[klier]

IMHO, that legendary, characteristic exclusivity that defined M-B vehicles for decades began to evaporate with the presentation of competitors such as the E34 and later the E39 BMW 5ers.

The W210 is where the roles reversed forever. BMW has quite frankly never looked back since.