Mercedes could preview A-Class, B-Class replacements this year

Mercedes-Benz could preview a new range of compact models later this year based on its new MMA architecture, CEO Ola Kallenius said.

The automaker will continue to sell compact cars even as its emphasizes sales of its highest-margin models, including the luxury Maybach brand, the high-performance AMG division and off-road G-Class. The average selling price of a Mercedes car has risen 43 percent since 2019, and is now about 73,000 euros ($78,000).

The strategy to focus on high-end cars has raised questions about whether Mercedes is still committed to the compact segment, Kallenius acknowledged on Friday when presenting Mercedes’ 2022 financial results.

When asked if there would be future investment in smaller cars, Kallenius replied: "The short answer is yes."

He added: "But we will focus on the models that we believe are the most successful on a worldwide basis. We might later this year even tease what that future would look like.”

Mercedes currently sells seven main compact models in Europe built on the MFA2 platform: The A-Class, B-Class, A-Class sedan, CLA coupe, CLA station wagon, GLA (plus EQA EV) and GLB (plus EQB EV).

Mercedes plans to reduce that number to four in the coming years.

In contrast to Mercedes' future MB.EA architecture for larger cars, which is only for battery-electric vehicles, MMA is able to accommodate internal-combustion engines, although it was designed around a full-electric powertrain. The first vehicles of four vehicles on the platform is expected to be launched in 2024.

The "entry level" segment, which includes about 20,000 sales from the Smart brand, accounted for 595,916 of Mercedes-Benz Group’s 2.04 million passenger car sales, or about 29 percent. 

That figure represents a 2 percent decrease from 2021, while overall sales were up 5 percent. Sales in the "top end" segment rose by 9 percent and in the “core” segment, were up 8 percent.

'Entry luxury'

Kallenius has described Mercedes’ new compact strategy as “entry luxury,” and plans to increase prices for compact models in an effort to boost margins closer to its overall target of 14 percent.

Mercedes told analysts in March 2022 that entry level models would make up a much smaller share of overall sales by 2026.