The automotive market is undergoing a rapid transformation, and it appears that even established giants like Mercedes-Benz are not immune to these changes.
Rise of Chinese Manufacturers
In a surprising development, the luxury automaker is reportedly considering discontinuing two of its most popular and best-selling SUVs, the GLE and GLC.
This shift is primarily driven by the remarkable rise of Chinese manufacturers, which have rapidly captured a significant share of the global automotive market. Brands such as BYD, XPeng, and NIO have emerged as formidable competitors, offering reliable and cost-effective vehicles that appeal to a wide audience, according to Motor.
As of 2023, China has solidified its position as the world’s largest automotive market, surpassing both Europe and the United States in production and sales. In fact, Chinese consumers now purchase more vehicles than their European and American counterparts combined.
Pressure on Traditional Automakers
The increased competition has placed immense pressure on traditional automakers like Mercedes, which has become increasingly reliant on the Chinese market. In 2023, an astonishing 36% of Mercedes’ total global sales came from China.
This reliance has led to significant concerns about profitability, which has plummeted to 7.5%, down from an expected 11% earlier this year.
In response to these pressures, Mercedes is reevaluating its lineup, with rumors suggesting the potential discontinuation of popular SUV models. While smaller vehicles may face greater scrutiny, the future of the GLE and GLC remains uncertain as the company shifts its focus toward electric vehicles.
