Mercedes Is Cutting Cars to Make More SUVs and Crossovers
Sedans and coupes are being increasingly squeezed out of the market by SUVs and crossovers, not to mention trucks. Quite a few brands, including Ford and Chevrolet, have all but eliminated their passenger car lineups because of this. Mercedes is already planning to phase out a few of its AMG and large-engine sedans. But recent news suggests the German automaker is planning something an even more extensive product cull.
Mercedes is axing some passenger cars and boosting SUV production
This report comes courtesy of Automotive News, via a webinar Mercedes hosted with its dealers late in June 2020. In that webinar, Mercedes-Benz USA CEO Nicholas Speeks reportedly told dealers that 7 passenger car models would be cut sometime in the near future. However, “a source familiar with the plans” claims that more might follow.
This news comes at a troubling time for passenger cars as a whole, especially luxury ones. Although luxury crossover sales grew 73% in 2019, luxury car sales dropped 37%. In addition, sales of off-lease SUVs and trucks officially out-stripped passenger cars at the end of 2019. And the coronavirus pandemic has accelerated the drop in sedan sales overall.
To be fair, Mercedes’ decision is motivated by more than just sales. The German brand’s total lineup has roughly doubled in size in the past 2 decades, The Drive reports. One Mercedes-Benz dealer, AN reports, described the US portfolio like the menu at The Cheesecake Factory.
That many models make it easy for potential customers to be overwhelmed by choice. Plus, it means dealerships have to stretch limited budgets and space to promote, display, and support each one, Roadshow explains.
Which Mercedes models will be cut?
Speeks didn’t state which Mercedes passenger cars face cancellation. However, Motor1 reports the likeliest models are the C-Class, E-Class, and S-Class coupes and convertibles, as well as the CLS coupe. In addition, at least one Mercedes-AMG GT sedan is on the chopping block. We’ve reached out to Mercedes-Benz USA for comment; we’ll update this post if and when we receive a reply.
[UPDATE 7/27/2020 2:30 PM CST: An official Mercedes-Benz spokesperson told us that it is against company policy to comment on future products.]
Some of these rumors are based on changes in factory production. For example, AN notes that Mercedes is moving C-Class sedan production from its Vance, Alabama plant to factories in China, South Africa, and Germany. Also, the A-Class compact sedan production at Daimler-Nissan’s joint-venture Aguascalientes, Mexico factory is ceasing. In both cases, AN reports the increased demand for Mercedes’ SUVs and crossovers requires similarly-increased production.
However, The Drive reports Mercedes’ planned electric EQS sedan is still going ahead with production. Though, it’s unclear if the COVID-19 pandemic will affect its planned 2021 launch. It’s worth point out that the EQS isn’t the only EV Mercedes plans to release. The flagship sedan will be joined by the entry-level EQB crossover, as well as an as-yet-unnamed 3rd model.
Are other brands following suit?
Mercedes isn’t the only brand cutting down on passenger cars in favor of SUVs and crossovers. Lincoln recently ended Continental production, despite dealer demand. And while Cadillac’s sedans and coupes are still going strong, Buick’s selection has shrunk to nothing. Honda’s even canceled the Civic in Japan.
However, some automakers are continuing to support passenger cars. Jaguar, for example, is keeping its sedans and sports cars in place. Kia just released its K5 sedan. BMW is gearing up to release multiple PHEV sedans, and Acura’s TLX Type S is almost ready. And though Dodge canceled its minivans, it’s keeping the rest of its passenger cars.
In fact, Dodge’s relative success with passenger cars may hold a potential lesson for Mercedes. Dodge’s president claims that the reason why crossovers have taken over is that too many passenger cars lack a “unique identity.” With fewer models crowding the space, it may be that Mercedes’ remaining passenger cars can shine brighter.
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