Mercedes-Benz: Sales share of top models to increase by about 60% in 2026

Company car group 8% higher on new prices for top two customers

By Kim Richters

Mercedes-Benz Group AG has raised some mid-term margin targets as it updated its strategy as a standalone automaker after splitting from its commercial vehicles last year, saying it plans to increase its share of top-of-the-line vehicles. to increase.

The German luxury car maker said on Thursday it is targeting an operating margin of about 10% in adverse market conditions and about 12% in fair conditions by 2025. Previously, it had a medium to high single digit margin in adverse and high single digit margin in fair conditions. .

In a favorable market environment, Mercedes-Benz is now targeting an operating margin of approximately 14% by 2025 compared to the previous double-digit forecast. It also expects a margin of approximately 8% in very unfavorable circumstances.

In 2021, the company's auto and van business reported a margin of 12.4%.

Like its peers, Mercedes-Benz has faced several headwinds this year, including rising raw material costs, the ongoing shortage of semiconductors and other supply chain problems related to the war in Ukraine.

"Unforeseen geopolitical or macroeconomic shifts and resource locations can obviously not be part of this target network, but Mercedes-Benz is redesigning the company to ensure stronger profitability even in a more difficult environment," the company said.

Speaking at Thursday's strategy event, the automaker said it plans to use more than 75% of its investment to make products for the most profitable market segments and increase its top vehicle sales share by about 60% by 2026 compared to 2019 levels. In 2019, Mercedes-Benz sold about 250,000 top models, a sales share of about 11% that year.

Mercedes-Benz also confirmed plans to go all-electric by 2030 where market conditions allow and to become carbon neutral by 2039.

Write to Kim Richters at [email protected]