Mercedes set to focus the luxury end of the market

Mercedes-Benz has said it will drop some of its cheaper models and focus on the more profitable luxury end of the market. The German car maker will recast itself as “a dedicated pure-play luxury car company,” it said, in an attempt to take on rivals such as Ferrari.Car manufacturers including Mercedes have enjoyed a period of high profits as wealthy people sitting on cash piles after two years of lockdowns look for ways to spend their money. A shortage of parts, most notably computer chips, has prompted car makers to charge more for their vehicles, improving margins. Last month Mercedes said revenues for the first three months of the year jumped 8pc despite selling 52,000 fewer cars as a result of higher prices, and after more of its top-end models rolled off the production line.The company will drop the number of entry level models from seven to four and focus its efforts on high-performance AMG and limousine Maybach models, funnelling 75pc of its investment into its luxury brands. Ola Källenius, chairman of the board of management of Mercedes-Benz, said: “What has always been the core of our brand is now also the core of our strategy: the luxury segment. We are...

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