Mercedes readies EV-focused MMA platform for 'entry luxury' models

Mercedes-Benz's new, more luxury-focused MMA entry-level platform will launch with an all-electric model in 2024.
 
The "electric first" platform, which can also be adapted for internal-combustion engines, will introduce a new generation of technology and set the standard for future Mercedes architectures to come, CEO Ola Kallenius said. 

Mercedes briefly showed a silhouette of a compact coupe-styled sedan that will be built on the platform at the event. Analysts were also given a preview of a physical car, but no official images were released.

"This new MMA architecture ushers in a new generation of technology, both on the drivetrain side in terms of battery chemistry, efficiency. and the drivetrain itself," CEO Ola Kallenius told analysts at the group's capital markets day Thursday in Monaco. It will also use the new MBOS infotainment system.

Mercedes plans to push its entry-level models much further upmarket, with higher prices and a lower share of the automaker's overall sales. The number of body styles in the segment (mostly compact size) will be cut to four from seven, and the share of Mercedes' sales will be trimmed 25 percent from 2019 levels by 2026. 

Entry-level volumes were 680,000 globally in 2019, Mercedes said, a figure that fell to 570,000 in 2021. In that same time period, average selling price rose by 20 percent; it will be "significantly up" by 2026.

The automaker has previously described MMA as "electric first," while still able to incorporate internal-combustion engines. Mercedes did not mention internal-combustion versions during the event Thursday. 

Kallenius said the Vision EQXX show car that Mercedes used to demonstrate a 1,000 km (620 miles) battery range  was the "proof point in action" for the electric technology in MMA models.

The MMA architecture will also debut Mercedes' MBOS infotainment operating system, which will appear on all future platforms, including the electric MB.EA architecture that will gradually replace the EVA2 platform that underpins the EQS and EQE.
 
Compact models on the MMA platform will have a higher margin than those on the current MFA2 platform, which includes A- and B-Class models, Mercedes Chief Financial Officer Harald Wilhelm told analysts. "Margin per unit should be better than what we had in the past," he said. 

Mercedes has significantly increased sales volume in recent years by expanding its compact lineup with models such as the CLA Shooting Brake and B-Class minivan. Overall sales reached 2.3 million in 2019 up from 1.4 million in 2011. 

But the new sales have come at the expense of profit margins, Wilhelm said.  

"Maybe I have not been completely happy with the margin in 2019," he said of the compact models. He said that year will be the baseline for future entry-level profit targets, which were not broken out specifically.

Overall, Mercedes is aiming for 14 percent margins by the middle of the decade, and the automaker said that entry luxury profits would "support group margin ambition."

Profits for the company's compact models improved in 2021 as Mercedes cut some trim lines and raised prices, Wilhelm said.

Prices will continue to increase in the future, Mercedes said, without being specific. 

"The entry point to the Mercedes brand in the future will be a different one than today," Kallenius said.