Mercedes Benz Group AG (MBGAF)

[TPX]

Mercedes-Benz Lineup Expansion Won't End; More New Models Planned

APR 30, 2019

Incoming Daimler boss Ola Källenius wants to save $6.75 billion while expanding into the electric realm.

As the future of the auto industry unfolds, electric vehicles will be a major part of it. EV growth in the next decade should be tremendous, and though it’s unlikely electric power will completely replace internal combustion engines anytime soon, the paradigm shift will lead to completely new models and new methods of manufacturing. Mercedes-Benz is aware of this, and as the automaker’s parent company Daimler AG prepares to welcome its new CEO Ola Källenius, a delicate balancing act of cost-cutting with EV expansion is already in his sight.

Automotive News Europe reports the incoming boss spoke at length about such things during a media roundtable at Auto Shanghai earlier in April. Among other things, Källenius is striving to find $6.75 billion in savings by 2021, which may sound like the far future but is actually less than two years from now. There isn’t a specific plan in place thus far, save for focusing on cutting costs while raising efficiency at Merc’s manufacturing plants.

One thing the company doesn’t seem keen to do, however, is shrink its vast model portfolio. In fact, according to the report, the number of Mercedes models should actually increase as the all-electric EQ line expands. There are already over 40 various Mercedes models and submodels, but Källenius apparently believes broad sharing of architectures and components will allow the automaker to offer buyers more choices while keeping costs low. In theory, the variety can help drive fresh sales in places such as Europe or America where the market is flat. And of course there’s Asia – an expanding market where Mercedes hopes to expand further.

It’s admittedly a very general plan, but it seems to rely on some rather important variables. Electrification is still quite expensive – it’s one thing to simply drop an electric motor and a battery into a vehicle originally designed to carry all the fluids and components to burn fuel, but getting the most from electric power means all-new designs, new technology, and new processes that are EV-specific. These production costs should drop as electric development progresses, but the exact savings and timeframe are tricky to pin down. According to the report, Källenius says this will take many years, and nobody really know how much lower the costs will go.

Meanwhile, 2021 is barely a year and a half away.

https://www.motor1.com/news/347320/mercedes-lineup-new-models-planned/