Looking at Mercedes-Benz’s Recent Vehicle Lineups
Mercedes-Benz is one of the world’s most iconic auto manufacturers. Its tri-star logo is instantly recognizable on the front of every vehicle to roll off the line since 1926. With this kind of brand equity, it’s no surprise that Mercedes-Benz is one of the most important luxury brands in all of North America, regardless of industry. But, has the brand begun to lose its way?
For decades, Mercedes had employed an established brand hierarchy and architecture. Sedans were broken out into C-Class, E-Class, and S-Class designations with each individual model carrying a modifier, such as the C-250, which typically denoted engine displacement (i.e., a 2.5-liter engine in the C-250). SUVs existed as MLs and GLs, while SL designation went to the crown jewel roadster of the portfolio. While there were special editions in each product line, the brand benefited from this well-understood architecture. C-Class sedans were entry-level, meant for young professionals venturing out into luxury vehicles for the first time, while S-Class sedans were much larger and well-appointed estate vehicles meant for established executives.
A Shift in Direction
In recent years, however, Mercedes has begun to lose its way as it attempts to react to consumers’ evolving tastes. With a mandate to fill seemingly every single identifiable market segment, Mercedes’s product line has bloated to such a level that as of Fall 2019, the brand carried 19 different kinds of convertibles alone, according to Jalopnik.
Industry observers have begun to ask the question, did Mercedes get it wrong? Have they extended their product line so quickly and so methodically that they’ve cannibalized their own brands? For two years running, first in 2017 and again in 2018, journalists pressed then head of Mercedez-Benz Dieter Zetsche at the Geneva Auto Show on whether the brand had gone too far in its product line extensions. In 2018, Zetche acknowledged the threat of cannibalization (as did his BMW counterpart, Ian Robertson, in 2017), but brushed it off, reasoning that they expected the strategy to pay off by siphoning business away from competitors.
However, Zetche did leave open the door to admitting the brand had gone too far by saying, “There are not that many niches left to fill, of course. But, we stay creative and innovative. I can’t tell you what ideas we will have tomorrow. But we have a pretty full picture.” By the time Zetche left the company in May 2019, rumors had begun to circulate of impending cutbacks as Mercedes-Benz began a new project to streamline its product line.
What’s Next for MBUSA
Ultimately, Mercedes-Benz will have to reckon with the downsides of a bloated product line and inconsistent brand hierarchies and architecture. We’ve already begun to see the strategy’s first causalities, particularly with the brand’s iconic SL roadster, which saw a 19% year-over-year decrease in sales in 2019. While their competitors BMW and Audi continue to reinforce their brand architectures to streamline options for consumers into a veritable shoe size model (the A3, A4, A5, A6 or the 2-Series, 3-Series, 4-Series, etc.), Mercedes will need to reevaluate their own strategy to ensure they don’t waste decades of brand equity.