Mercedes Growth Depends On New Niches

Mercedes GT3

Speaking at Daimler Group’s annual shareholders meeting, chief executive Dieter Zetsche said that Mercedes-Benz would be aiming to attract customers by entering “new segments” for the company. The expansion of Mercedes’ model offerings, he went on to say, would mean that the world’s third-largest luxury car manufacturer should be able to outstrip their competitors’ sales growth. Indeed, Zetsche predicted that Mercedes would see a “significant” increase in operating profit this year.

Of course, all of this is great news for shareholders if Zetsche’s plans come to fruition, but what does it mean for European consumers, given that so much of Mercedes’ current focus is on the rapidly expanding and important Chinese market? Well, much of the German car maker’s appeal in China – at the luxury end of the market, at least – comes down to the fact that its cars are popular in Europe, too. So, whatever Mercedes’ designers come up with needs to work in both parts of the globe. According to Zetsche, the Mercedes brand will go beyond what BMW and Audi can deliver in the premium-car global market by 2020. He said that he expects the company to launch no less than 30 new models between now and then. Indeed, he claimed that a dozen of these future models would be entirely new – with no predecessor. That means new models on British roads, too.

Of course, you might expect any chief executive to talk things up in front of his shareholders, but Zetsche’s words already have some currency. The C-Class is already undergoing something of a redesign and a convertible version is said to be currently undergoing speed tests ready for a launch next year. Many owners know that most used Mercedes C-Class that are sold in the UK retain a good deal of value and the addition of a soft-top version to the range is only likely to broaden its appeal.

In another announcement made to his shareholders, Zetsche said that Mercedes would unveil a sport utility/coupe prototype in April.
Unsurprisingly, this exciting concept will first be shown at the Beijing Motor Show, which is the leading one in the country. For many, the idea of a new model concept getting its premier in China is of no surprise. What has raised an eyebrow or two – on the other hand – is how Mercedes’ new designs are so clearly aimed at younger drivers. Some have commented that under Zetsche’s leadership, the brand is throwing off its middle-aged man appeal for products that are designed to appeal to younger drivers.

If Zetsche’s strategy pays off, then we really could see Mercedes gain back the crown it lost to BMW of being the world’s leading premium brand car maker. According to the chief executive, Mercedes sees a great deal of potential in the combination of a coupe and an SUV. It is perhaps crucial to the plans of the Stuttgart-based manufacturer that these proposed models attract new customers to the brand rather than eating into their own customer base by simply offering more choice. For now, at least, Zetsche thinks that he has the balance about right.

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