Mercedes-Benz is set to make significant changes to its SUV lineup, with plans to discontinue several niche models, including the GLA and GLB Coupes. This move is part of a broader strategy to simplify the brand's product range and focus on more profitable vehicles, aligning with the company's goal to become a "more focused luxury car company.

Mercedes-Benz to Discontinue Polarizing SUV Models

Model Discontinuation:

    • The GLA Coupe and GLB Coupe models are slated for discontinuation.
    • Standard GLA and GLB SUVs will continue to be produced.

Strategic Shift:

    • This decision is part of Mercedes' larger strategy to reduce the number of model variants.
    • The company aims to decrease entry-level compact car offerings from seven to four models.

Focus on Profitability:

    • Mercedes is shifting focus to more profitable core models and electric vehicles.
    • The strategy targets higher-margin vehicles and expansion in the top-end luxury segment.

Product Development:

    • Resources will be redirected towards the most profitable market segments.
    • Emphasis on developing dedicated electric vehicles and proprietary car software.

Sub-Brand Development:

    • Plans to unlock the full potential of sub-brands like AMG, Maybach, G, and EQ.
    • Each sub-brand will have targeted plans for growth and increased EBIT contribution.

Electrification Push:

    • Commitment to full electrification of the product portfolio.
    • AMG set for high-performance electrification starting in 2021.

Customer Relationships:

    • Aim to foster lifelong relationships with customers.
    • Focus on increasing loyalty, repeat purchases, and recurring revenues from services and updates.

Cost Reduction:

    • Target to cut fixed costs by more than 20% by 2025 compared to 2019 levels.

Market Strategy:

    • Actions to improve and recalibrate market strategy.
    • Focus on optimizing balance between volume, price, and channel mix.

This strategic shift by Mercedes-Benz reflects the changing dynamics of the automotive industry. The move away from niche models like the GLA and GLB Coupes indicates a prioritization of profitability over model diversity. By streamlining their product lineup, Mercedes aims to concentrate resources on high-demand segments and emerging technologies, particularly in electrification.

Mercedes-Benz to Discontinue Polarizing SUV Models

The focus on sub-brands like AMG and Maybach suggests that Mercedes sees significant growth potential in these premium segments. This aligns with the broader industry trend of luxury automakers expanding their most exclusive offerings to capture high-margin sales.The emphasis on customer relationships and recurring revenues highlights the growing importance of software and services in the automotive sector. As cars become more connected, the potential for ongoing revenue streams through updates and subscriptions increases.

Mercedes-Benz's decision to discontinue niche SUV models like the GLA and GLB Coupes marks a significant shift in the company's product strategy. By focusing on core models, electric vehicles, and high-end luxury offerings, Mercedes aims to enhance profitability and solidify its position in the luxury car market. This move, while potentially disappointing to fans of the niche models, aligns with broader industry trends towards streamlined product lineups and increased focus on electrification and digital services.