Germany's Mercedes-Benz recently outlined a new business strategy for the future, with plans to divide the lineup into several categories; Top-End Luxury, Core Luxury, and Entry Luxury. The brand has said the lowest rung of the premium ladder will comprise four models (currently seven) and will introduce a new platform and operating system.

The new MMA platform will be introduced in 2024 and underpin the quartet of vehicles, the first being an all-electric model. Currently, the MFA2 platform underpins compact models in the Mercedes-Benz range, such as the AMG CLA 45.

According to CEO Ola Kallenius, the new platform will usher in new standards for the brand and, while referred to as "electric first", will also be capable of accommodating ICE drivetrains. "This new MMA architecture ushers in a new generation of technology, both on the drivetrain side in ... battery chemistry, efficiency, and the drivetrain itself," he added.

Speaking at the company's Capital Markets Day, Kallenius said Mercedes-Benz intends to position its entry-level vehicles further upmarket to net more significant profits. The MMA platform will aid this ambition. The reduction in entry-level offerings will see the company's market share fall by 25% in 2026 compared to 2019.

The luxury automaker provided an example of this. In 2019, it shifted 680,000 entry-level vehicles on a global scale. Two years later, that figure fell to 570,000. However, the average selling price increased considerably, to 20%. The Covid-19 pandemic and resultant supply issues have shown carmakers where the real profits lie - at the top of the range.

Mercedes and rival BMW have openly admitted to prioritizing high-end motorcars throughout the ongoing chip crisis and, as such, have both reported greater profits in the past years.

Entry-level Benzes underpinned by the MMA platform will prove more profitable than their MFA2 counterparts, said company CFO Harald Wilhelm. "Margin per unit should be better than what we had in the past." Aside from improved profits, the new architecture will also introduce the brand's new operating system; MBOS.

It may debut on MMA vehicles, but it will spread to the MB.EA platform - which will be built by Mercedes itself and debut in 2025. By the middle of the decade, the world's oldest automaker is hoping to attain 14% margins, noting that pricing will increase in the future.

Kallenius added, "The entry point to the Mercedes brand in the future will be a different one than today." The company hasn't said which models will be trimmed but we assume the A-Class Sedan will be the first to go. It's already been discontinued stateside and, with the popularity of SUVs, a new generation wouldn't make financial sense for Mercedes.