Despite the growing demand for SUVs, Mercedes is still confident luxury sedans are still relevant.
The new 2021 Mercedes S-Class arrives at a time when the market is shifting towards luxury SUVs over sedans. In the time since the last-generation S-Class launched, demand for sedans has fallen dramatically. But despite the SUV sales boom, Mercedes-Benz boss Ola Kaellenius is confident lower-volume luxury sedans will remain relevant for a long time.
"With regard to relevance, the three-box sedan in the luxury segment remains highly relevant," he said during an interview with CarsGuide. "I'm super happy that we have the GLS, that we now have a GLS Maybach as well, so we have an answer on the SUV side, many customers want that."
Kaellenius added that demand for luxury sedans "seems to be very, very solid," especially from business customers. "I don't see a fundamental shift away from that luxury sedan anytime soon," he said.
Last year, Mercedes sold around 71,700 S-Class sedans, representing around 3.1 percent of its overall 2,339,562 volume. China remains the most popular market, with around 700 S-Class sedans sold every month. In contrast, one in every three Mercedes sold last year was an SUV, including model such as the G-Class, GLA, GLB, GLC, GLE, GLS, and the electric EQC.
The new 2021 Mercedes S-Class is equipped with an abundance of advanced technology such as a smarter AI voice assistant and an augmented-reality head-up display, but it's important for Mercedes that the luxury sedan remains profitable to justify the flagship sedan's steep development costs.
Mercedes already predicts the new S-Class will be a huge sales hit for the automaker. "The intelligence of an organization is to evolve how you can create fantastic technology while at the same time, in an intelligent way, have modular structures and be able to produce several cars on the same line," said Kaellenius. "I feel confident both about sales, but also the profitability of the car."