Mercedes Says More Price Hikes Are Coming

The automaker needs to offset its increased costs.

By: Angel Sergeev

Jul 31, 2023 at 4:11am ET

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Last week, Mercedes-Benz released its quarterly sales and financial update, which showed positive signs for the year so far. The German premium automaker registered 515,746 deliveries in Q2 of 2023, which represents an increase of 6 percent compared to the same period last year with top-end divisions Mercedes-AMG and Mercedes-Maybach enjoying growth of 19 and 39 percent, respectively. But even though things are looking good for the second half of the year, the manufacturer has no intentions to lower its prices.

In fact, Mercedes will keep raising the prices of its products and that was confirmed by the company’s Chief Financial Officer, Harald Wilhelm, right after the Q2 financial report was released. “Will the price lever be as strong in the coming quarters? We will be a bit more careful... but we still have cost increases to digest," Wilhelm told Automotive News Europe during a press conference.

Gallery: 2024 Mercedes-Benz E-Class First Drive Review

But why is that price hike? Well, simply put, Mercedes estimates that its costs will continue to go up in the coming months. This includes production expenses, as well as property, plant and equipment, research and development expenditures. In general, the automaker calculates its costs in 2023 have been significantly higher compared to 2022.

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On the bright side, Mercedes is one of the few companies that report a “noticeably improved” supply chain. Also, energy prices are expected to continue to be at a significantly lower level than in the previous year for the rest of 2023 and also on average for the year as a whole. But while the Germans believe this will have benefits for the development of automotive markets in the second half of this year, the demand for new premium cars will likely remain subdued in some of the brand’s most important markets.

Last but not least – considering the continuously increasing prices – what is the automaker’s outlook for the second half of 2023 in terms of sales? The rate of sales from the first-half is expected to remain at approximately the same level, and full-year sales are thus seen at the prior-year level.

Source: Automotive News Europe