Mercedes-Benz is already well-known for being a luxury car brand, however, the German automaker has redefined its global strategy. The company is now looking to become the leading luxury car brand in the internal combustion engine (ICE) sector and the electric vehicle (EV) segment too.
Mercedes-Benz announced its plan to become a ‘dedicated pure-play luxury car company’ that will strategically target higher profitability by focusing its portfolio on luxury vehicles. While the brand is already succeeding in this market segment, it’s aiming to take on the likes of Rolls Royce, Bentley and other manufacturers that are synonymous with ultimate style and comfort.
Formex Industries is a leading manufacturer of automotive components and welded assemblies. We work alongside Tier 1 suppliers that connect our products to Mercedes-Benz vehicles manufactured in East London, South Africa. This brand has been making big strides in the EV market recently, so its current trajectory is a promising sign for Formex.
Mercedes-Benz targeting more profit
The tri-star emblem has long been associated with prestigious cars, but now Mercedes-Benz is aiming to become the world’s most valuable luxury car brand. It hopes to do so by recalibrating its product portfolio and allocating three-quarters of its investments into those cars that return the largest profits.
At the moment, the biggest profits lie in ultra-luxury cars. Mercedes-Benz has divided its structure into three core segments; high-end luxury, core luxury and entry luxury. The brand will focus its efforts on the high-end luxury sector in a bid to grow its sales by 60% before the end of 2026.
This includes vehicles in the Mercedes-Maybach line-up, as well as the Mercedes-AMG and Mercedes-EQ stables too. The renowned S-Class, G-Class and GLS vehicles will join limited edition models, such as the Black Series cars, in this high-end luxury segment.
Mercedes-Maybach is set to expand
The Mercedes-Maybach product range will be expanded with the highly-anticipated arrival of the EQS SUV in 2023. In addition, the pinnacle model Mercedes-Maybach SL is going to be revealed in its concept form very soon. These two vehicles will be joined by the limited edition Maybach S-Class by Virgil Abloh. Only 150 of these long-wheelbase cars will be made in honour of the late designer.
The brand is also set to release ultra-exclusive vehicles under the new ‘Mythos Series’ that deliver more luxury and exclusivity than ‘regular’ Maybach models. This undeniable focus on high-worth cars is the first sign that Mercedes-Benz is committed to its new strategy.
What about the brand’s core vehicles
The majority of Mercedes models sold are C-Class and E-Class sedans, as well as their SUV counterparts. These core models are vital to the brand as they form its high-volume segment. Mercedes believes that the best way to ensure continued profitability in these sectors is to fast-track electrification.
The new E-Class is set for release in 2023, but the exciting new EQE SUV will first be revealed later in 2022. This EV is sure to be a popular seller for the brand, but it will also show Mercedes how its core-segment EVs will perform on the international market.
Entry luxury segment to round off the strategy
The entry luxury segment includes the A-Class, B-Class, CLA, GLA, GLB and derivates. Although Mercedes will continue to manufacture these models, it will cut down the range from seven cars to just four. They have not said which vehicles will be discontinued but the remaining models will get a massive technological boost in 2024 when the new Mercedes-Benz Operating System (MB.OS) is launched.
Mercedes-AMG cars are also set to include more electric derivatives. The AMG.EA platform will underpin these new AMG EVs, which have already been revealed on the latest Vision AMG Concept. The new strategy will be an interesting development to watch. As the global automotive market is facing large shifts, it will be important to see how various brands respond and adapt.
Formex Industries will continue to work alongside international car manufacturers and provide world-class components and assemblies for the new models. Changes in strategy from Mercedes-Benz and other brands present a renewed opportunity for growth for Formex. For more information about our components and products, please contact us today.
Formex Industries is a metal forming and assembly company that supplies a variety of complex products to the local automotive industry and the export market. The company is based in the Nelson Mandela Bay metropole, South Africa’s foremost region for automotive manufacturing and export.
Formex is a supplier with 69% black ownership, of which 37% are black women. The company is owned by Deneb Investments Limited – a subsidiary of Hosken Consolidated Investments Limited (HCI) – one of South Africa’s biggest true B-BBEE companies listed on the Johannesburg Stock Exchange (JSE).
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