Mercedes to unwrap A-Class, B-Class concept at Munich show

Mercedes-Benz will show an “entry segment” concept at the IAA Munich auto show in September, as the premium automaker shifts its strategy toward higher-end models under CEO Ola Kallenius.

Mercedes did not offer any details about the concept when it released a silhouette image on Monday.

The concept and other Mercedes models will be on display at the Munich Residence palace complex.

A production version could be based on the MMA architecture, which can accommodate full-electric as well as combustion-engine versions, Kallenius said earlier this year.

Kallenius has described Mercedes’ new compact strategy as “entry luxury,” and plans to increase prices for compact models in an effort to boost margins closer to its overall target of 14 percent.

Mercedes told analysts in March 2022 that entry level models would make up a much smaller share of overall sales by 2026.

The strategy to focus on high-end cars has raised questions about whether Mercedes is still committed to the compact segment, Kallenius acknowledged in February when presenting Mercedes’ 2022 financial results.

When asked if there would be future investment in smaller cars, Kallenius replied: "The short answer is yes."

Mercedes’ “entry premium” compact offerings include A- and B-Class models such as the A-Class hatchback and sedan, the CLA coupe and station wagon, and the B-Class Sports Tourer minivan.

European sales of those models have been stable or growing this year, according to figures from Dataforce. Sales of the A-Class in Europe dropped to 42,886 in the first half from 43,560 in the same period last year; CLA registrations rose to 28,265 from 19,725; B-Class sales fell to 9,211 from 11,778.

In 2022, the "entry level" segment, which included about 20,000 sales from the Smart brand, accounted for 595,916 of Mercedes-Benz Group’s 2.04 million passenger car sales, or about 29 percent. That was down slightly from the previous year.