Let go of arrogance, Mercedes-Benz will carry out the "fire sale" to the end?

Rim visibility

2024-06-27 19:05Creator in the automotive field

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01 Affected by the impact of domestic mid-to-high-end electric vehicles, luxury car brands such as Mercedes-Benz, BMW, and Audi have to embark on the road of "exchanging price for volume" in the Chinese market.

02 In the first quarter of this year, Mercedes-Benz's performance in the Chinese market was hardly optimistic, with a total of 168,900 passenger car sales, down 12% from 191,000 in the same period last year.

03 In order to keep the market, Mercedes-Benz opened a large price reduction mode, and some models were even sold at a six-percent discount.

04However, Mercedes-Benz's price reduction strategy did not have the desired effect, but had a negative impact on brand value and value retention.

05Experts believe that traditional luxury brands such as Mercedes-Benz need to make changes in products, design, and marketing to cope with the competition of new brands.

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Photographed at the Beijing Auto Show in April 2024

Unexpectedly, the ridicule of "if you don't work hard, you can only drive BBA" has become a reality, and those new power bigwigs who talk about "overtaking BBA" are afraid that their mouths will burst with laughter.

The reason is that due to the impact of domestic high-end electric vehicles, Mercedes-Benz, BMW, Audi, etc., which were originally invincible, also had to bow their heads and embark on the road of "exchanging price for volume". Recently, entries such as "Mercedes-Benz halving price cut" and "170,000 to buy BMW" have been hotly discussed.

Among them, Mercedes-Benz, which has always had a strong price, has attracted the attention of "Rim Visibility". In the first quarter of this year, Mercedes-Benz's performance in the Chinese market was hardly optimistic, with a total of 168,900 passenger car sales, down 12% from 191,000 in the same period last year; The sales volume of pure electric passenger cars is only 6,300 units, which is not worth mentioning in the entire market.

In this case, Mercedes-Benz has started a big price reduction mode. In the terminal market, some models are even sold at a six-percent discount, such as the C200L, which has an official guide price of 334,800 yuan, and can be driven away in the early 200,000s. There are also new energy models that cannot be sold, and the EQB terminal quotation has dropped to 176,000 yuan, equivalent to half of the guide price.

It is understandable that "exchanging price for volume" is a helpless move, but I especially remember that Kang Linsong, chairman of the board of directors of Mercedes-Benz Group AG, said in an interview that Mercedes-Benz will not follow Tesla's pricing strategy and adjust prices according to the market, which will reduce consumers' psychological expectations for brand value and vehicle value retention rate. Why is it that one set of words is another, but another set of actions?

It is a question of how long the "country" can be kept by price reduction, but it is certain that if it continues to be sold, Mercedes-Benz will lose the last dignity of the traditional luxury car brand.

1

Half-price fire sale ●

In the luxury car camp, Mercedes-Benz belongs to the "big brother" like existence, for a long time consumers have a high recognition of the "three-pronged star emblem" so that it is very strong in terms of price and value retention rate, many models once had to increase the price of the car. For example, in 2019, Xinhua News Agency exposed that a certain high-end off-road vehicle of Mercedes-Benz in some areas needs to increase the price by about 500,000 yuan.

Even in the face of the intensifying domestic car "price war", Kang Linsong believes that it should not be blindly followed, and for the Mercedes-Benz brand, providing consumers with more durable and more residual value of new cars is the primary goal in the future. However, having said that, in fact, in the past two years, Mercedes-Benz seems to have changed its "face" and repeatedly made concessions in the terminal market price.

"Rim Visibility" noticed that as early as the beginning of the previous year, there were rumors that Mercedes-Benz launched a "110,000 yuan huge discount" activity. According to the Pacific Automobile Network, at that time, dealers in Taiyuan, Shenzhen and other places quoted Mercedes-Benz EQC with a cash discount of up to 110,000 yuan; Dealers in Beijing, Shantou and other places give discounts, and the purchase of all Mercedes-Benz S-class models can be discounted by up to 110,000 yuan.

Last year, on major automobile forums, you can also see information about the preferential promotion of many Mercedes-Benz models. For example, at the end of last year, the lowest configuration model of the 2023 Mercedes-Benz GLB has dropped to about 182,200 yuan in Shanghai and Beijing, which is as much as 117,600 yuan lower than the manufacturer's guide price.

This year, the phenomenon continues, even to a staggering degree. Some Mercedes-Benz fuel vehicle models have a six-fold discount, and new energy models are directly as low as five discounts, which has triggered a large number of netizens to discuss, and on June 19, the entry "Mercedes-Benz half-cut price reduction" was listed on Weibo hot search.

It can be seen on the Autohome platform that there are many market posts about Mercedes-Benz's "substantial price cut", "hot promotion" and "price reduction". For example, Mercedes-Benz A-class cars are carrying out preferential activities in Changzhou, and they can enjoy up to 100,000 yuan of car purchase subsidies, making the minimum starting price as low as 150,300 yuan, which is equivalent to a six-fold discount.

For another example, it is written in the Guangzhou preferential promotion channel that Mercedes-Benz S-class is carrying out an unprecedented preferential activity, with a maximum discount of up to 180,000 yuan, so that the S-class model can be reached at a more affordable price, and the minimum starting price has been adjusted to 782,600 yuan.

In terms of electric vehicles, Mercedes-Benz is not soft at all in reducing prices. According to the information on June 25, Mercedes-Benz's electric sedan Mercedes-Benz EQS is in a very tempting preferential activity, and consumers in Tianjin can enjoy a cash discount of up to 350,000 yuan, and the original manufacturer's guide price of 881,000 yuan for the 2023 model 450+ Pioneer Edition only needs 531,000 yuan.

Another electric SUV model, the Mercedes-Benz EQB, had a discount of up to 171,000 yuan in Suzhou at the beginning of this month, and the lowest starting price of the 2024 EQB 260 after the discount is only 181,000 yuan, which means that consumers have the opportunity to win the Mercedes-Benz electric car at nearly half the price.

A series of terminal preferential information makes Kang Linsong's remarks seem to be a joke, and it can only be said that the market will educate every hard-mouthed brand boss.

2

Sales dived ●

Choosing to cut prices is essentially a compromise with the market, and in the era of brutal electrification, traditional luxury brands, including BBA, have to unleash some of their brand premium power to retain more of the market. Last year, Mercedes-Benz delivered about 765,000 new vehicles in China, which is basically the same as the delivery level in 2022.

This year, Mercedes-Benz's situation in the Chinese market may not be as good as last year, and since the beginning of this year, its sales of both fuel vehicles and electric vehicles are not ideal.

According to the sales data released by Mercedes-Benz in the first quarter of 2024, Mercedes-Benz's total global sales in the first quarter were 568,400 units, of which 463,000 were passenger cars, which was about 8% less than the first quarter of 2023; Sales of pure electric models totaled 50,500 units, down 9% from the same period last year, of which 47,500 pure electric passenger cars were sold, down 8% year-on-year.

In the Chinese market, in the first quarter of this year, Mercedes-Benz delivered nearly 170,000 passenger cars to Chinese users, although it is still the region with the highest sales volume of Mercedes-Benz, but there was a year-on-year decline of nearly 12%, resulting in a year-on-year decrease of 8.9% to 5.793 billion euros in total revenue in the Chinese market.

In contrast, in the United States, the United Kingdom and France, Mercedes-Benz's sales in the first quarter of this year increased by 3%, 43% and 35% year-on-year, respectively, which makes the performance of the Chinese market seem a little out of place. In other words, the decline in Mercedes-Benz's global sales in the first quarter has a lot to do with the sluggishness of the Chinese market.

If you focus on the field of new energy, in the first quarter of this year, Mercedes-Benz's overall sales of pure electric passenger cars were 47,500, a year-on-year decrease of 8%. The sales of pure electric vehicles of the old rival BMW Group reached 82,700 units, a year-on-year increase of 27.9%, which is a sharp contrast between a decline and an increase.

In addition, according to the data of Chedi, Mercedes-Benz sold only 6,300 pure electric vehicles in China in the first quarter, of which even the best-selling Mercedes-Benz EQE SUV sold more than 2,000 units, which is difficult to rank first in the domestic high-end new energy market, and the gap between BMW and BMW is also widening.

When we continue to expand the time range, we can see that Sina Automobile's data based on the number of new car compulsory traffic insurance as the statistical caliber show that in the first five months of this year, Mercedes-Benz in China accumulated 289,300 vehicles, down a lot from 319,700 vehicles in the same period last year.

It is known that Mercedes-Benz's sharp price cuts have been going on for a long time, so it shows that these blockbuster promotions have not had much effect this year. On the contrary, after the five-fold and six-fold discounts, netizens ridiculed "If it goes down like this, I can really afford it", which has undoubtedly had a negative impact on the brand value and value retention rate.

According to the research report on China's automobile retention rate jointly released by the China Automobile Dealers Association and Jingzhen Valuation, in December 2021, Mercedes-Benz's value retention rate was still 79.5%, and by April this year, its value retention rate had dropped to 67.2%.

According to the analysis of the China Automobile Dealers Association, traditional luxury brands in the era of electrification have rarely made breakthroughs in terms of products, and brands such as Mercedes-Benz, BMW, and Lexus are indistinguishable from independent brands in terms of technology, and it is becoming more and more common for high-end consumers to abandon overseas luxury brands and choose their own brands.

3

What's the trick? ●

"Rim Visibility" has previously analyzed that there are many factors behind the decline in Mercedes-Benz sales. First, the transformation of electrification is very slow, and it has become a "latecomer", and some of the "oil-to-electricity" products launched are difficult to be recognized by consumers; Second, it has become more and more unstable in the era of fuel vehicles, and now in China's luxury car market, many independent new energy brands have successfully broken through, which is threatening the position of BBAs.

The major automobile sales rankings show that almost all of the top sales in the current list are new energy vehicles. For example, in May this year, the sales volume of the M9 was 16,500 units, while the BMW X5 was only 7,683 units; in the B-class sedan market, Mercedes-Benz was far behind Tesla; in the C-class market, the sales of ZEEKR 001 in May were also higher than those of the Mercedes-Benz E-class.

In this case, what else can Mercedes-Benz do to stabilize and not continue to decline? Obviously, how the product of the future is is the most critical. Mercedes-Benz plans to launch 15 new models in China this year.

In addition, Mercedes-Benz has obtained a road test license for conditional autonomous driving (Level 3) highways in Beijing. Mercedes-Benz has also launched the first stations of the Supercharger network in China, the United States and Germany.

At the recently concluded 2024 Beijing International Auto Show, Mercedes-Benz also brought 21 blockbuster models, covering a variety of drive modes and various market segments, including the world premiere of the all-new Mercedes-Benz all-electric G-Class off-road vehicle.

At the same time, at the auto show press conference, the Mercedes-Benz CLA-Class Concept Car showcased the electrification and digital technology innovation of the Mercedes-Benz Modular Architecture (MMA) platform and the self-developed new architecture MB.OS operating system, which marks the next step towards an electric future.

At that time, Tang Shikai, a member of the board of directors of Mercedes-Benz Group AG and responsible for the Greater China business, said in an interview: "Mercedes-Benz's determination to promote the transition to electrification has not changed" and "Our strategy is to continue to further expand the electrification product lineup with quality, comfort, safety and intelligence." ”

In any case, Mercedes-Benz has the attitude and determination to transform and develop. It's just that this is a "protracted war", compared to the opponents, the pace of Mercedes-Benz is still slow, if you can't establish a technical advantage as soon as possible, make a big breakthrough, then I'm afraid it is still difficult to win more space.

In addition, "Rim Visibility" believes that in order to compete for the market with new forces such as "Wei Xiaoli", Wenjie, and Zeekr, traditional luxury brands, including Mercedes-Benz, need to find ways to enter the hearts of young consumer groups, and make changes in design, marketing, service, etc.

Author | Dugo

来源 | 车圈能见度（CarVisibility）

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