“In recent years we've done a lot of good things: design, product engineering, brand rejuvenation, sales growth. We've put Mercedes back on the top, but we haven't yet reached our full potential in terms of to turn this volume increase into growing profits, "explains Ola Källenius, Chairman of the Board of Directors of Daimler AG and Mercedes-Benz AG at the virtual conference" Mercedes-Benz Strategy Update "(photo).
“This is why we have refocused and are launching our new strategy,” he continues. “We intend to build the most desirable cars in the world. It's about leveraging our strengths as a luxury brand. to increase economic value and improve the composition and positioning of our product portfolio. We will unleash the full potential of our sub-brands: AMG, Maybach, G and EQ. "
"Our strategy is designed to avoid non-core activities in order to focus on the areas that matter: electric vehicles and patented automotive software. We announce our clear commitment to the full electrification of our product portfolio and our determination to ensure that the company is completely carbon neutral, in line with our Ambition 2039 objective ".
Six pillars to build the future
1) Think and act like a luxury brand
If luxury has always been part of the soul of Mercedes-Benz, the German brand announces that it wants to focus more on this segment. Luxury will therefore be an integral part of all products, interactions with customers and digital technologies. The ultimate goal is to offer a true luxury experience, at the same time electrical, software and durable.
2) Focus on profitable growth
Mercedes-Benz will take steps to improve and re-calibrate its market strategy. These measures will be focused on optimizing the balance between volume, price and distribution of distribution channels in order to guarantee better contribution margins to the current and future portfolio.
3) Expand the customer base by developing sub-brands
If Mercedes-Benz will remain the standard-bearer, sub-brands such as AMG, Maybach, G and EQ will shift into high gear by benefiting in particular from a switch to electrification. Each brand will pursue objectives specific to its specific market, such as AMG in connection with Formula 1 and motorsports.
4) Welcome customers and increase recurring revenue
Mercedes-Benz is committed to maintaining lasting relationships with its customers in order to engage them with the brand over the long term. This increased loyalty will be based on an increase in repeat purchases, rapid growth in recurring revenues, from services and spare parts, but also from updates and subscription services.
5) Be a leader in electric mobility and software
Mercedes-Benz aims to take the lead in electric motors and automotive software. As part of its "Electric First" strategy, the Etoile manufacturer is announcing four new electric vehicles based on its future large-format electric vehicle architecture ('Electric Vehicle Architecture' or EVA).
The luxury sedan EQS will be marketed in 2021 with an electric range of more than 700 km. It will be followed by the EQE, the EQS-SUV and the EQE-SUV. In addition, AMG, Maybach and G will also switch to electric. From 2025, many more models will be added to the range of electric vehicles on the second new dedicated platform: the Mercedes-Benz Modular Architecture (MMA), designed for compact and mid-size cars.
6) Reduce costs and improve industrial footprint
Mercedes-Benz will take important new measures to reduce its cost base and improve its industrial footprint by 2025. At the end of a year 2020 when its breakeven point proved too high, the brand plans to reduce its fixed costs by more than 20%, thanks to reduced expenses, capacity adjustments and reduced personnel costs. Investment and R&D spending are also expected to decrease by more than 20% in the same period. Variable costs will be reduced by 1% net per year.
Other announcements made by Mercedes also include the development of a new architecture of electric motors with a sophisticated inverter and high voltage technology. But also increased research into batteries and the launch of the 'Vision EQXX' technological program. Its goal is to build an electric vehicle with unprecedented efficiency and range. Mercedes-Benz has tasked its engineering group with pushing the boundaries of electric autonomy and efficiency with a multidisciplinary and cross-functional team based in Stuttgart, supported by the engine manufacturers of the Mercedes F1 team in Brixworth.
Finally, in the field of automotive software, Mercedes-Benz announced the arrival of its own operating system MB.OS. This will be developed in-house and its launch is scheduled for 2024. It will allow Mercedes-Benz to centralize control of all areas of the vehicle as well as its consumer interfaces. Software development will allow for greater speed and more frequent updates, and will be designed around scalable architectures that will control future development costs.
Source: Mercedes-Benz press release
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