2025 was not good for "Mercedes". But the luxury brand is looking to the future with hope: 40 new models are to be launched on the market by 2027. With the "biggest product offensive in history", new great successes are expected.
For several months now, the "Mercedes-Benz" dealership in Pforzheim, Baden-Württemberg, has been even more glamorous. The newly built building is exactly in the brand's style: high class and luxury. Since 2022, the car manufacturer has been strategically focusing on luxury cars, which generate more profit per unit than the base models, explains German public broadcaster ARD. For the Pforzheim dealership, however, the A-Class is also strategically important. "We also want to attract new target groups", says sales director John-David Kazmierczak.
Overall, 2025 was not a good year for "Mercedes". Compared to the previous year, profit fell by 49 percent: 5.3 billion euros instead of the previous 10.4 billion. And turnover fell by nine percent to 132.2 billion euros, writes ARD. "In a dynamic market environment, our financial results are within our forecast", assures Mercedes boss Ola Källenius. However, analysts expected slightly better results.
A-Class to get successor
The dynamic or rather difficult market environment is the result of the tariff dispute with the US and intense competition from China, explains the German public media. There, "Mercedes" competitors are increasingly fighting for customers in the luxury segment. In the manufacturer's most important market, sales have collapsed: in 2025, "Mercedes" sold 19% fewer cars in China compared to the previous year. The company is responding to the "dynamic market situation" by adapting the luxury strategy announced in 2022 and still continuing to maintain the base model of the A-Class.
In recent months, there have been many indications that there will be a cheaper "Mercedes" model in the future. The A-Class will get a successor.
Less luxury, more electric cars?
According to Helena Wisbert, professor of automotive economics at the University of Ostfalia in Wolfsburg, "Mercedes" will adjust its strategy, which relied on luxury, because the plan to increase the average price of cars to 100,000 euros has not worked. "Now "Mercedes" must take a different path and sell more cars again," says the expert.
Affordable cars for everyone instead of luxury cars for a few: this is how the decision for the new A-Class can be summed up. If 40,000 euros for a car can even be considered affordable, that's how much an A-class costs right now.
According to the automaker itself, "Mercedes" plans to launch 40 new models by 2027. With the "biggest product offensive in history", the luxury German brand is expected to reap success again.
China remains an important market for the company. But the electric S-Class EQS "has failed" there, says automotive expert Beatrix Kaim. This is a problem because electric cars and hybrids are popular in China. According to Kaim, their share among new cars is over 50 percent, with a third of them being purely electric cars. That's why Kaim considers it a "mistake" that the new S-Class, which "Mercedes" recently presented in Stuttgart, will not be offered as a purely electric version for the time being.
Adaptation instead of reorientation
This is not the first strategy of Ola Källenius, which he has subsequently adjusted. Initially, the goal by the end of the decade was "Electric Only". However, it was canceled because the development of electromobility was progressing more slowly than expected. However, today Källenius is clearly committed to climate-neutral mobility as a long-term goal, writes ARD.
Now "Mercedes" is also adjusting its luxury car strategy, but the focus will still remain on models in the high price segment. "This is the most important part of our profitability", emphasizes Källenius. This is a correction, not a complete change of course.
"In other times this might have had some consequences, but now it probably won't", says Helena Wisbert. Källenius' decisions regarding the aforementioned strategies are understandable given the changed situation in the most important markets.