Mercedes-Benz has begun a massive product push, debuting the first set of 40 new and refreshed models scheduled to come to market over the next two years. The inertia continues despite economic and regulatory headwinds across the world that threaten to impact sales and product strategies.
Among the models coming to market are part of the plan are the Mercedes-Benz CLA, which is on sale now, a significantly upgraded S-Class in 2026, the battery-electric GLC that debuted at IAA a few weeks ago and an electric C-Class sedan. Mercedes-AMG product debuts are also on the docket.
In February, the company announced the Next Level Performance program, a set of initiatives that are designed to improve the company’s performance via direct sales, enhanced customer service and production cost cutting.
“When we do our financial plans, it starts with investments into the future,” Ola Källenius, chairman of the board of management and CEO of the Mercedes-Benz Group, told Newsweek during IAA Mobility, a transportation industry trade show.
He explained the foundation of the company’s financial plans by posing a question: “How do we make sure that we stay leading on innovation, leading on technology, have a product portfolio that we think serves the markets and the segments that are relevant to Mercedes?”
Källenius has tasked the company’s employees with vigorously pushing forward as they envision the vehicles and business opportunities of tomorrow that result in spending the company’s money, and earning it more. “It’s a push, push, push, push, push mentality,” he said.
The CEO’s push directive comes despite revenue in 2024 being 4 percent lower than in 2023. Still, the company finished the year profitable.
“We use those cash flows and give them to shareholders. It’s really that simple, and it’s right. Over the last five years, we have built up an extremely healthy balance sheet,” Källenius said.
“Premium makers typically have higher margin, but their investors expect that they perform to that higher level. As with mainstream makers, the erosion of profitability affects investor activity as well as reducing the amount available for business operations, be it the research and development, capital expenditure or basic selling and general administration costs,” Stephanie Brinley, associate director of AutoIntelligence at S&P Global Mobility, told Newsweek.
Part of having a healthy balance sheet is eliminating debt. It’s one of the largest obstacles other automakers, like Nissan Motor Corporation, have to contend with. In June, Reuters reported that Nissan has $4.5 billion in debt due this year, part of about $50 billion in total debt on the books, according to Finbox.
“The industrial side of Mercedes-Benz has no industrial debt – zero,” Källenius said. “And, we have €30 billion cash on hand.” That figure equates to about $35 billion USD. General Motors has about $5 billion less and BMW Group last year reported having about two-thirds that amount.
“It’s a relatively big number, but we also live in uncertain times. So I think, in this phase with everything that’s going on in the world and geopolitics and this, that and the other, if we face the next few years of heightened uncertainty, accelerated transformation and so on, I’d rather do that from a position of a healthy balance sheet and a position of strength than if we would have we would be sitting on debt,” Källenius explained.