How Mercedes-Benz became so prestigious and why it is challenged

Mercedes-Benz can boast of having given the world the first production car. It has long been an innovator, a tireless pursuer of quality and engineering excellence.

Many consumers say that owning a Mercedes-Benz is a sign that they finally made it in life. It is considered one of the most aspirational brands among the largest automakers, even by luxury car buyers who prefer their competitors’ cars, according to research by industry survey firm AutoPacific.

But the automotive world is changing. Governments and some consumers are pushing for electric vehicles, and companies are racing to develop new forms of transportation, including self-driving cars.

Some of these new technologies, such as electric powertrains, challenge traditional Mercedes-Benz strengths. After all, one of the things the three-pointed star was known for was its superior engine technology.

Mercedes-Benz, say some industry watchers, has been a bit slower than some to adapt to the challenge of electrification. Mercedes-Benz said in early 2021 that it planned to delay the introduction of its EQC electric sport utility vehicle in the United States for the foreseeable future, even though SUVs are the most popular light vehicle on the American market today. The company said it still plans to launch its electric sedan.

The German luxury brand and its traditional peers like BMW and Audi are also facing challenges in the growing and extremely important Chinese market from electric startups like Tesla and Chinese manufacturers like Li Auto, according to some analysts. Historically, the big three German brands have controlled 60% of the luxury market in China, but that share is eroding as Tesla continues to open new stores in China, according to a Piper Sandler report.

Mercedes-Benz has heritage, prestige, talent and a lot of experience going for it. But the auto industry is making big turns.


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