Munich It seems paradoxical: Daimler boss Ola Källenius warns his shareholders on the one hand that sales of Mercedes vehicles in the third quarter as a result of the semiconductor shortage will be “noticeably” below those of the second quarter of the year. On the other hand, the Swede sees the Dax group in a “happy situation”. The reason: The demand for sedans and SUVs with the star logo is still high, explained Källenius in the run-up to the IAA-Mobility mobility fair in Munich. In addition, Mercedes currently offers its customers “probably the best product portfolio that we have ever had”. The result: The Swabians can sell their bodies at top prices. In the first half of the year, Daimler generated an operating profit margin of almost 13 percent.
But how sustainable are such dream returns? Daimler CFO Harald Wilhelm believes that it is fairly sustainable: “We are not assuming that the margins will decline, but that they will remain very healthy”. The manager wants to maintain the current “momentum” in terms of price enforcement beyond the chip bottleneck and further reduce the Dax Group’s fixed costs. In the past 18 months, Daimler has already “dramatically reduced” its breakeven point, emphasizes Wilhelm.
Pure volume growth has become obsolete for the Stuttgart-based company. Hardly anyone in the star troop is bothered by the fact that arch-rival BMW is now selling more vehicles. You no longer chase after the “volume crown”, sums up Mercedes boss Källenius.
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The 52-year-old rejects the popular tricks used by many vehicle manufacturers to increase sales with the help of deals with car rental companies or fleet operators. “We deliberately don’t do that,” says Källenius. Rather, his approach is class equip mass. The product mix is decisive here. This means that the range of expensive luxury cars is tending to expand, while some compact cars such as the B-Class are gradually being phased out.
Hardly any Stromer in the entry-level segment
It is precisely this return to the luxury segment that should ensure that the margins at Mercedes remain clearly in double digits, even with the rapidly increasing share of electric vehicles in total sales. In principle, the contribution margins from electric vehicles are currently significantly lower than from combustion engines. This is mainly due to the battery. The production of the heart of every electric car is expensive, not least because it incurs high raw material costs.
In the case of smaller vehicles in particular, the additional effort involved has hardly been worthwhile to date. Mercedes customers are therefore looking for something like an electric equivalent of the A-Class, i.e. the entry-level Benz, just as in vain as a fully energized C-Class. Instead, the brand with the star is presenting the spearhead of its electrical range at the IAA.
Five months after the premiere of the EQS, the world’s most aerodynamic production car with a range of up to 780 kilometers, Mercedes is unveiling something like the smaller brother of the new flagship with the EQE in Munich. “And you know: as a second-born one enjoys some advantages,” says Källenius.
The electric version of the E-Class can travel up to 660 kilometers without recharging and can also be delivered with the huge screen band (hyperscreen) as a replacement for a classic dashboard. In contrast to the EQS, the EQE should also be available at prices well below 100,000 euros.
G-Class is to be electrified
Daimler has high hopes for its electric business sedan. It should help to boost sales of battery vehicles. Analysts believe that between 60,000 and 80,000 EQE units sold per year are realistic. The more the better.
After all, Daimler wants to sell half of its new cars with electric drives by 2025 and is preparing to only offer new cars with batteries by the end of the decade. Sooner or later, the Stuttgart-based company therefore wants to electrify almost all series.
Classic with electric drive
The G-Class should also be available electrically in the future.
Even the G-Class, a 2.5-ton off-road vehicle, is to be electrified. Mercedes is now showing what the battery monster might look like in the form of a concept car. “New technology, familiar styling”, explains CEO Källenius and promises a spectacular drive at the EQG. “That is a real G, but without emissions”. He hopes that the transformation of the classic will reach the customers. In the combustion engine world, the G-Class is an absolute guarantee of returns.
Some industry observers wonder, however, whether it would not be better to discontinue the G-Class produced in Graz with the end of diesel and gasoline. Jürgen Pieper from Bankhaus Metzler, for example, considers the model to be a “fossil” that makes Daimler’s sustainability prose appear rather hollow. An electric drive train is far from turning the make into a green, ecological car.
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