Luxury, luxury, luxury: The Mercedes group is even more radical on its most expensive models.

This was explained by CEO Ola Källenius and his CFO Harald Wilhelm on Thursday morning in a conference call with journalists.

Three quarters of the investments are to flow into the most expensive cars, there is an electric product offensive in the luxury sedans from Maybach, the high-powered AMG cars and the boxy G-Class.

And these so-called top-end luxury models, which include the S-Class, are said to account for an ever-increasing share of sales.

Mercedes will present its strategy to investors at a capital market day in the afternoon.

The title of the event is: “The Economy of Desire”.

Gustave parts

Business correspondent in Stuttgart.

  • Follow I follow

The group could also sacrifice the A and B class for this.

Neither model is mentioned in a press release explaining the company's strategy.

When asked about this, Källenius said: The entry point into the Mercedes brand is being redefined.

"I'll leave the rest to your imagination," he said.

In the future, Mercedes will divide its models into three categories: In addition to the absolute luxury models, there are "core luxury models" such as the C or E-Class and soon there will also be a model specially tailored to China.

For the "entry-level luxury models", the group wants to "considerably upgrade the technological substance of the products," according to the statement.

Mercedes speaks of "higher positioning", which should mean, among other things, that the cheapest Mercedes cars will become significantly more expensive in the future.

"We see significant progress in pricing," CFO Wilhelm said on Thursday.

"We want to maintain this momentum." So Mercedes continues to turn the price screws diligently.

Källenius emphasized in the conference call that Mercedes had already embarked on the luxury strategy before the pandemic and the shortage of semiconductors.

The strategy will continue to be pursued thereafter.

This can be understood as a nod to competitors who, due to the lack of chips, are currently also primarily producing expensive, high-margin cars.

According to the company, profitability should rise to 14 percent by the middle of the decade if the market environment is favorable.

This is roughly what the analysts at Deutsche Bank had expected.

The luxury strategy has been well received on the stock market so far, and from the perspective of investors, the company is now worth three times as much as it was at the low point at the beginning of the corona pandemic.

From the point of view of the Deutsche Bank analysts, previous capital market days have made a contribution to this.

The absolute luxury models in which Mercedes is increasingly investing are referred to as “secret Porsches” due to the high margin.