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Mr Källenius sounds a lot like the CEO 20 years ago who said MBs were over engineered. He didn't last long. The comments were at the same FT event where Musk said he'd let Trump back on Twitter after he bought it. Today Musk is putting on hold his acquisition of the company. A lot of things are said at these events which are never really meant. So we'll see.
 
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The horse has already bolted. Mercedes Benz is no longer an exclusive automobile manufacturer. Like it’s obvious rivals, it’s been chasing greater volumes for years and has consequently diminished both it’s air of exclusivity and has been cost cutting like crazy which shows in its products. It will take years to rebuild it’s brand reputation as a purveyor of the highest quality cars and service which is what they need to do if they really want to refocus solely on high margin vehicles. Problem for MB is volume is king in todays landscape. It’s how they get decent discounts from their supply chain and sustain their global presence. Without the volume, all the cars in their range just go up in cost to produce, and given the prices for each car category have a ceiling, their margins get squeezed if they want to sell at decent enough volumes to stay in business.

To be clear i’m not saying MB are terrible, I’m just saying they are no superior than other mass manufacturers and they operate in a market that they are unable to rewrite the rules within. So wanting to focus on only high margin models maybe desirable, but it’s not realistic without massively rescaling their entire business model.

Death of the A Class (if that really is the plan) will come about due to the switch to EVs. Maybe MB will look to grow their Smart brand to address the small EV market rather than pen a clean slate design for an electric EV A Class. Or perhaps establish a new mass market brand. That’s the only way I could see them removing the smaller lower margin cars from their range and still being a volume force in the market.
 
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The horse has already bolted. Mercedes Benz is no longer an exclusive automobile manufacturer. Like it’s obvious rivals, it’s been chasing greater volumes for years and has consequently diminished both it’s air of exclusivity and has been cost cutting like crazy which shows in its products. It will take years to rebuild it’s brand reputation as a purveyor of the highest quality cars and service which is what they need to do if they really want to refocus solely on high margin vehicles. Problem for MB is volume is king in todays landscape. It’s how they get decent discounts from their supply chain and sustain their global presence. Without the volume, all the cars in their range just go up in cost to produce, and given the prices for each car category have a ceiling, their margins get squeezed if they want to sell at decent enough volumes to stay in business.

To be clear i’m not saying MB are terrible, I’m just saying they are no superior than other mass manufacturers and they operate in a market that they are unable to rewrite the rules within. So wanting to focus on only high margin models maybe desirable, but it’s not realistic without massively rescaling their entire business model.

Death of the A Class (if that really is the plan) will come about due to the switch to EVs. Maybe MB will look to grow their Smart brand to address the small EV market rather than pen a clean slate design for an electric EV A Class. Or perhaps establish a new mass market brand. That’s the only way I could see them removing the smaller lower margin cars from their range and still being a volume force in the market.
Spot on! Mercedes started going rapidly downhill when it merged with Chrysler in 1998 and its quality and engineering hasn't recovered properly even after it demerged with the Americans.
 
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