Mercedes-Benz will debut its MMA platform for smaller, “luxury” models in 2024, as it aims for higher profits in the compact segment.
Mercedes-Benz’s new entry-level MMA platform, more focused on luxury, will be launched in 2024 with a fully electric model in 2024, the company said.
The “electric first” platform, which can also accept internal combustion engines, will debut with a new generation of technology and set the standard for future Mercedes architectures, said CEO Ola Kallenius.
“This new MMA architecture introduces a new generation of technology, both in terms of battery chemistry, efficiency and transmission itself,” said CEO Ola Kallenius. It will also use the new MBOS infotainment system.
A new era
Mercedes intends to push its more advanced entry-level models, with higher prices and a lower share of the carmaker’s total sales. The number of body styles in the segment (mostly compact sizes) will be reduced to four from seven, and the share of Mercedes sales will be reduced by 25% compared to the levels from 2019 to 2026.
Entry-level volumes were 680,000 globally in 2019, Mercedes said, a figure that dropped to 570,000 in 2021. Over the same period, the average selling price increased by 20 percent; will be “significantly increasing” by 2026.
The automaker has previously described MMA as “primarily electric”, while still incorporating internal combustion engines.
Kallenius said that the Vision EQXX show car that Mercedes used to demonstrate 1,000 km of battery life was “proof” for the electric technology of MMA models.
At the same time as the MMA architecture, Mercedes’ MBOS infotainment operating system will debut, which will appear on all future platforms, including the MB.EA electrical architecture that will gradually replace the EVA2 platform that underlies EQS and EQE.
Compact models on the MMA platform will have a larger margin than those on the current MFA2 platform, which includes A- and B-Class models, Mercedes chief financial officer Harald Wilhelm told analysts. “The margin per unit should be better than we had in the past,” he said.
Volume, but at a cost
Mercedes has significantly increased its sales volume in recent years by expanding its compact range with models such as the CLA Shooting Brake and the B-Class minivan. Total sales reached 2.3 million in 2019, compared to 1.4 million in 2011.
But new sales have come at the expense of profit margins, Wilhelm said.
“Maybe I wasn’t completely satisfied with the margin in 2019,” he said of the compact models. He said that year will be the benchmark for future entry-level profit targets, which have not been specifically broken down.
In general, Mercedes is aiming for a 14% margin by the middle of the decade, and the carmaker said that the luxury profits at the entrance would “support the group’s margin ambition”.
The company’s compact model profits improved in 2021 as Mercedes cut some equipment lines and raised prices, Wilhelm said.
Prices will continue to rise in the future, Mercedes said, without being concrete.
“The entry point to the Mercedes brand in the future will be different from today,” said Kallenius.