Both Mercedes and BMW have been criticized for chasing volume by launching a multitude of smaller, less expensive compact cars, and while these aren't going away anytime soon, the duo is switching focus to bigger and pricier cars to target higher profit margins. Rather than relying on the traditional volume-based sales target, the two aim to sell fewer cars and make more money.
In an interview with
Financial Times
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Long story short, Mercedes and BMW know people will pay even more for their luxury cars, and therefore prices are not going to come down after the microchip shortage will end.
Bernstein analyst Arndt Ellinghorst says reducing discounts by one percent boosts profits across the car industry by a whopping $20 billion. He went on to mention discounts have gone down by more than two percent in the United States and Europe compared to the high levels available before the pandemic.
Those hoping to get a good deal on a new Mercedes once the microchip shortage will end are in for a disappointment: "One day or another, the semis issue will be gone and we will carry on with the price, and the margin, and the mix focus," according to Harald Wilhelm. It's the same story if you're planning to buy a BMW at a good price: "Customers are ready to wait three to four months, and this is helping our pricing power."