• Mercedes-Benz to intentionally cut global sales volume - to sell less cars, but at higher average selling prices
• Entry-level compact car models to be cut from the current 7 models to 4
• Remaining 4 models to be sold at significantly higher prices, with 25 percent reduction in market share

Mercedes-Benz has once again confirmed that it will be cutting down its range of compact car models – now totaling 7 – to just 4 models, as the company shifts its focus to grow sales with higher profit margin higher-end models aimed at the wealthy.

The company’s compact car-only MFA II platform currently underpins the A-Class, A-Class Sedan, CLA, CLA wagon, B-Class, GLA, and GLB, including EV derivatives like the EQA and EQB.

For now, it is unclear which 3 models will be culled. The more important thing that Malaysians want to know would be if the A-Class still has a future. The A-Class doesn’t sell well outside of Europe. It is not offered in USA and doesn’t sell very well in China – the two biggest markets for luxury cars.

In his latest financial presentation to investors, CEO Ola Kallenius reaffirmed that Mercedes-Benz will continue to invest in developing new compact car models, but with a caveat that profit margins must meet a certain threshold, and the company will intentionally cut sales volume in this segment.

That’s just another way of saying that the A-Class / A-Class Sedan – if it survives into the next generation, will be a lot more expensive.

The presentation slide by CEO Ola on Entry Luxury states that Mercedes-Benz intends to significantly increase the average selling price for next generation Mercedes-Benz compact car models.

It is also projecting a 25 percent reduction in market share by 2026. The aim is to sell less cars, and to focus more on truly wealthy individuals looking for a compact size Mercedes-Benz.

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

He added: "But we will focus on the models that we believe are the most successful on a worldwide basis.

Kallenius also hinted that the first of the higher-end next generation Mercedes-Benz compact cars will be teased by the end of this year, for a market launch in 2024.

“We might later this year even tease what that future would look like,” he said.

The silhoutte of the car on the slide has a CLA-like profile. Could this hint to the CLA replacing the A-Class Sedan?

As the company reduces its sales volume in the compact cars segment by 25 percent, Mercedes-Benz aims to grow its market share in the top-end S-Class, G-Class, Maybach and AMG luxury segment by 60 percent!

As for the company’s core C-Class and E-Class and their SUV equivalents segments – the target is to maintain its market share. In keeping with its focus on profit margins rather than sales volume, the three-pointed star is not aiming for any major increase in sales volume.

It will however accelerate the introduction of battery EV models in this segment. The current EVA platform-based EQE and EQE SUV will be superseded by a new generation of MB.EA battery electric models as we get closer to 2026.