Mercedes-Benz working on an entry-level car to replace A-Class
What's the story
Mercedes-Benz is planning to launch a new entry-level model, as part of its strategy to increase sales volume. The move comes after the company extended the life cycle of its A-Class hatchback and sedan by two more years, until 2028. The decision highlights how automakers often misjudge customer preferences and market demands.
Strategy change
Shift from fully electric vision to hybrid approach
Mercedes-Benz had previously planned to go fully electric by 2030, "where market conditions allow." However, the updated strategy keeps combustion engines alive well into the next decade and possibly beyond. This shift is part of a broader strategy that includes the development of another entry-level model to fill in the price gap between existing cars.
Market positioning
Filling the price gap
The new entry-level model from Mercedes will fill the price gap between the A-Class and the upcoming electric CLA. The A-Class starts at around €34,400 in Germany, while the combustion-powered CLA is cheaper than the electric CLA but still more expensive than the A-Class, leaving a big price gap. Once the A-Class is phased out, Mercedes's base model will start from mid-€40,000s.
Official confirmation
Confirmation of new entry-level model
Mathias Geisen, the management board member for marketing and sales at Mercedes-Benz, has confirmed that a new entry-level car is in development. He said, "Believe me: in the long term, there will be an entry-level model in the Mercedes-Benz world."
Market strategy
Balancing act for premium brands
Despite the fact that a cheaper car won't deliver the same profits as higher-segment models, greater sales volume will help balance the books. This strategy is not just limited to Mercedes-Benz but also other premium brands like BMW and Audi, which continue to sell their affordable models. The move makes sense given the massive price gap between A-Class and new electric CLA.
Design speculation
Speculation around design and features
The exact design and features of the upcoming entry-level model from Mercedes remain a mystery. Automobilwoche speculates it could be a crossover, but many would prefer a CLA hatchback or something similar instead of just another SUV. For now, the A-Class will continue as both five-door hatch and four-door sedan variants in global markets.