Mercedes-Benz details its new strategy as the company prepares for the launch of several new products while also making the cuts necessary to help it stay flexible in a changing market environment.
Mercedes-Benz recently acknowledged that cost cuts are coming as the company also prepares to launch a massive amount of new products by the end of 2027.
It wasn’t too long ago that Mercedes-Benz said it was prepared to make its entire lineup all-electric with the company planning to axe its ICE-powered vehicles as it prepared to transform into a company that would put electrification as a central pillar of its long-term sales strategy. However, all has not gone to plan with the EQ lineup having lukewarm sales and the company being forced to change its approach to cope with changing market conditions and slumping demand for EVs as a whole.
Despite that, the company is still confident about its plans and used a recent meeting to not only outline all the new vehicles that it will be launching over the next few years, but also some of the cost cuts that need to be done in order for it to remain flexible enough to respond to changes in customer behavior.
A massive product launch is in the works
The bulk of the new products will be in higher-priced segments but a prominent exception will be a smaller and less-expensive version of the iconic G-Class.
A core part of this plan is a massive wave of product launches with the company planning to launch 19 ICE-powered models and an additional 17 EVs by the end of 2027. Most of these new models will be in the higher end of the pricing ladder hinting that the company is still willing to sell higher-priced vehicles at lower margins despite blowback from some investors who say the current strategy has failed especially after EV sales collapsed by a quarter last year.
A notable exception is found in plans for the G-Class SUV with a pyramid chart the company released appearing to confirm it is preparing to release a smaller version of the SUV that would also be less expensive than the current G-Class. Rumors about this model have floated around for the past several years, but the graphic in the company’s meeting presentation is perhaps the best evidence yet of the model happening with the chart even tentatively calling it the “9.” In addition to this pint-sized off-roader, the company also plans to release electric versions of the C, E, and GLC Classes. The S-Class is also getting updated in 2026 and reports suggest the company’s AMG brand is preparing a pair of high-performance EV models as well.
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Mercedes also has other matters on its plate
Along with the new products, Mercedes will also be doing cost cuts and beefing up its production capacity in the U.S. and China.
In addition to embarking on this strong product push, Mercedes-Benz is also focusing on shoring up other aspects of its operations to help protect itself from volatile market conditions. That includes localizing more production in China and the United States to help protect itself from the fallout of tariffs if President Donald Trump follows through on his plans to hit China with a 25% tariff on all vehicle imports starting in April. Boosting production in China and the United States in particular would help shield the company from these tariffs and the price increases that would come with it while also providing more capacity for many of the new models the company plans to launch.
Cost cutting will also be in full force with Mercedes-Benz also confirming it will be slashing production costs. While the company will not be closing any plants in Germany (a similar plan by Volkswagen was met with outcry) Benz will instead shift production of one of its models from Germany to Hungary where costs there are 70% lower. This move and others are part of its plan to cut costs by 10% before the end of 2027 before it doubles that figure by 2030. Other cuts will come from Benz outsourcing elements from its finance and human resource departments while also not replacing workers who retire and other measures.
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