The company's new CEO wants more profitability.
The Mercedes-Benz lineup has grown so much in recent years that it's difficult to keep count of every model. We didn't think the company's growth would ever end, but it seems like the German automaker has finally reached a breaking point. Mercedes currently sells 15 models but during a recent dealership meeting, the company said it plans to scrap some of its slower-selling models including the S-Class Coupe and Convertible, C-Class Coupe and Convertible, and the already discontinued SLC.
This represents a major shakeup to the Mercedes lineup, but it's still not enough for outgoing Daimler CEO Dieter Zetsche. Speaking with Reuters, Zetsche expressed his disappointment with profitability as Mercedes begins to invest in electric vehicles.
"Everything is under scrutiny - fixed and variable costs, material and personnel costs, investment projects, vertical integration, and the product range," Dieter Zetsche said. "Along with external factors, we are now also feeling the financial effects of the company’s transformation." Based on this statement, we see a lot more change coming to Mercedes than the simple axing of a few slow-selling models.
The newly appointed CEO, Ola Kaellenius, said he plans cut development costs for new vehicles by partnering with more rival companies by 2025. BMW and Mercedes have already partnered on ridesharing and autonomous technology, but perhaps the two could work on co-developing hybrids and EVs.
Mercedes is aiming to have a carbon neutral fleet by 2039 and will need to develop new powertrain technologies to meet this goal. The all-electric EQC SUV is a nice start, but Mercedes wants to keep prices down on new technologies for customers. "To do so, we have to cut costs and increase efficiency throughout the company,” Zetsche said. Mercedes has had an okay start to the year, to which Zetsche says "[it] was expected, but it doesn’t make it any better. In particular, we cannot and will not be satisfied with the current level of profitability.”