In our ongoing series of 'deep-dives' into our core brands, in this edition we look at all the news from Mercedes-Benz. We hope the information we've gathered will help shed light on what you may need to know before making any decisions. As always, get in touch with our expert team if you'd like to discuss your next lease in more detail.
Lead times and microchips
Mercedes experienced serious struggles during the second half of 2021, with huge delays to the likes of the popular hybrid, the CLA250e. Communication on these issues has been patchy in comparison to other marques, and they paused registration of any high co2 emission cars in December 2021, as part of a plan to manage their emissions record across Europe.
Electric vehicles seem to be heavily prioritised as with many manufacturers, and EQAs, the small crossover, are relatively quick to deliver at present.
Discounts and pricing
As with many manufacturers, Mercedes have pulled back on their discounts to dealerships at wholesale level, meaning the discounts on offer in dealerships for retail customers have all but evaporated. The fleet/leasing market, which independent brokers have access to, continue to be much stronger than the dealerships, further undermining the long-term viability of the current dealership business model. Preferential discounts are available for people who are part of a Salary Sacrifice Scheme, as Mercedes look to find ways to promote their electrification.
Models and Electrification
The discounts available in Mercedes EVs highlight the brand’s commitment to the new world of electric vehicles. The latest model, the EQS saloon, is the first EV to suggest a 400+ mile range in pure EV mode, and the manufacturer now offers more electric models than any other (and more than BMW, Jaguar and Land Rover combined).
The recent concept car, the model EQXX is headlined as offering “1,000 kilometres” of range, or around 600 miles, which would be something of a game-changer in the EV space if it were to be achieved. With mushroom fabrics as part of the interior, it is Mercedes latest play on full eco-warrior distancing itself from its AMG brethren. The new Mercedes EQB is the first 7-seater EV from the mass-market premium manufacturers, with the Tesla Model X currently impossible to order. Bear in mind it is more of a “Discovery Sport” or “Qashqai+2” 7-seater, with somewhat limited leg room for seats 6 and 7. It is however, available for delivery in Spring 2023.
Strategy Snapshot
With the tagline of ‘sustainable luxury’, it is clear the direction of travel Mercedes are heading in. The focus is all over electric vehicles, and the ability to capture a new market of brand loyalists as consumers adapt to the new world of EV, and deal with some of their preferred brands not offering EV options. The brand is also moving away from the ‘stack-them-high’ model of recent years, with the tap being turned off for ‘special offers’ that the likes of Select Car Leasing/Nationwide Vehicle Contracts have been utilising in recent years.
They’re also highly-profitable, despite the headwinds of COVID, chip shortages and soaring supply-chain costs. Mercedes parent, Daimler, recently admitted that the soaring profits of car manufacturers would be something they’d aim to retain as the shortage dissipates, with their CFO Harald Wilhelm telling the Financial Times “we will consciously undersupply demand levels…. “
In other words, don’t expect the return of semi-conductor chips to see a return to the mass-market discounting we saw on the likes of the A Class in 2019.
