Despite the well-known problems in the global car market, luxury cars continue to sell very well. And as the German press writes, local car manufacturers are profiting even better from this trend.
In this situation, there are two truths: some praise premium brands for their ability to work in difficult times, while others, on the contrary, criticize them. When Mercedes-Benz CEO Ola Kallenius talks about luxury, he delights in citing the famous Birkin handbag from Parisian leather goods expert Hermès. You can order this iconic thing only in the company store.
Customers have to wait a long time for the desired product, especially if the performance is exclusive (like the Hermès Himalaya Birkin model, sold at Christie’s for almost $380,000). What is this? An example of a premium automaker, sort of like a manual?
Ola Kalenius is a kind of sensible calculator who builds the work of his concern mainly from the point of view of high profits and profitability. The Swede, who just celebrated his 53rd birthday, declared luxury to be Mercedes-Benz’s overall strategy for the foreseeable future.
And Audi is also in this group
The company with a three-pointed star in its logo intends to develop primarily through expensive luxury models, while significantly limiting the range of models in the lower segments. It should be noted that with this strategy, Mercedes-Benz is not alone in the automotive industry, which is under enormous pressure due to the expensive transition to more climate-friendly electric drives.
For example, in the foreseeable future Volkswagen subsidiary Audi also plans to make more money from the development and production of luxury cars. In addition, as the head of the board of Audi AG Markus Dussmann, who, by the way, is only 12 days younger than his colleague from Mercedes-Benz, the company will soon give up the production of “small” models.
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The information that the basic Mercedes-Benz (meaning A-Klasse) will sink into oblivion in the middle of the current decade, the automaker prefers not to comment in detail. This was reported by the authoritative German publication Handelsblatt.
However, industry expert Ferdinand Dudenshofer says in an interview with a German agency that the company will in any case refuse the A- and B-Klasse models. And the management of the car manufacturer from Stuttgart does not care that in total it will have to lose more than 400,000 cars a year. The lost benefits will be compensated at the expense of the “cosmic” prices of the big Mercedes, including the electric ones.
Dependence on China
In his calculations, Ola Callenius bets on rich people, whose number, according to him, is growing around the world. The company reports very clearly the events in Ukraine, the rising inflation, the economic problems against the background of the shortage of semiconductors and problems with logistics. All this is taken into account, but it will not change the course of the automaker, as they say, the arrows are set. No wonder that the Italian Marco Gobetti, the boss of the Salvatore Ferragamo fashion house, is already on the Mercedes supervisory board.
The turn to even more luxury is a kind of bold and decisive step, says Ferdinand Dudenshofer. It is also repeated by representatives of official dealers. One of the directors who heads the Mercedes dealership in Duisburg noted that “the Mercedes-Benz brand risks losing social recognition.” In addition, the car manufacturer is becoming even more dependent on its key market – China. “This fact must be taken into account,” said Mr. Dudenshofer.
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The expert also raises some questions about the size of the company. Today, Mercedes-Benz employs more than 170,000 workers worldwide. “If the company was small, for example with 20,000 employees, the change would not be a big problem. Whether the bet will pay off, we will find out in 10 years at the earliest,” the expert notes.
“Made in Germany” is a symbol of luxury and technology
However, this concern is not shared by all industry experts. For example, Fernando Fastoso, a professor at Pforzheimer University, notes that large car manufacturers with a large number of employees can easily afford to produce extremely luxurious cars because the modern market is global.
According to him, Audi, BMW and Mercedes-Benz cars, even without current statements, are perceived as luxury goods almost everywhere in the world – even if they have less glitz than Italian supercars. “German luxury,” says Fernando Fastoso, “is luxury with craftsmanship and technology. In addition, Germany is known for its high environmental standards, which can contribute to the sustainable development of the automotive industry.” According to Mr. Fastoso, luxury is no longer a single and inviolable concept: “There is affordable and so-called ‘high-end’ luxury , which is most likely intended for a special kind of clientele.”
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Isabelle Artus of the Colbert Committee (fr. Comit é Colbert), an influential public organization that unites luxury goods manufacturers in France (Chanel, Givenchy, Lacoste, as well as Hermès and some champagne brands), believes that the car has already taken its place in the “luxury universe” and this, according to them, applies primarily to countries such as Italy and Germany, which produce elite cars. By the way, the manufacturer of expensive hypercars Bugatti was included in this organization 7 years ago, but for some reason left the community.
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3.2
Assessment 3.2 from 9 voice.
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