mikeavelli
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I think most of us love the S-Class. Reading the article their entire top end models are struggling. I think a big part of it is their MSRP and how much the price rose this generation.
Vehicle production at Mercedes's plant in Sindelfingen.
Mercedes S-Class production reduced to one shift on slow demand
Nathan Eddy, Michael Gerster | August 20th 2024 6:18 AM
BERLIN — The Mercedes-Benz S-Class will for the first time be produced in just a single shift in the automaker’s Factory 56 in Sindelfingen, Germany.
The fully digitalized plant, which opened four years ago, builds the company’s lucrative S-Class and the full-electric EQS, along with the Maybach and AMG brands.
The factory has operated with at least two shifts since it opened, but the nearly 1,500 employees must prepare for cutbacks upon return from their August vacation period.
“It is planned to transfer production at Factory 56 to a single-shift operation in the fourth quarter and to deploy some of the employees in other production areas of the plant,” a Mercedes spokesperson told Automotive News sister publication Automobilwoche.
The plant’s capacity has been underutilized for months as weakness in the upper part of the luxury market persists — a decline reflected in the company’s second quarter sales figures.
Combined sales of Mercedes’s top four models — the S-Class, EQS, the EQS, and GLS — were just 33,400 units between April and June, a nearly 25 percent drop compared with the previous year’s sales of 44,200 units.
The share of the top segment in total sales fell to 14 percent from 16 percent, resulting in the profit margin in Mercedes’ car business in the second quarter falling to 10.2 percent from 13.5 percent.
S-Class sales fell in all Mercedes’s top markets during the first half, according to data specialist Marklines.
Sales of the upper-premium model dropped 13 percent to 10,430 in China, 19 percent to 5,026 in the U.S. and, 27 percent to 4,249 in Europe, according to Marklines.
Mercedes CEO Ola Kallenius is facing challenges on multiple fronts, from China’s price war, a faltering focus on high-end models and high development costs.
Catastrophic blow to suppliers
The slump is also affecting suppliers, with the unnamed head of one major S-Class interior components supplier telling Automobilwoche that the reduction in vehicle production is a “catastrophe.”
A Mercedes dealer from the Stuttgart region reported that he last sold an S-Class in the fall of 2023, while another dealer has an EQS demo vehicle with just 5,000 km (3,100 miles) still sitting on the lot for weeks, priced at just under €82,000 ($90,400).
The price for a BEV vehicle with that configuration lists for more than €130,000 ($143,400).
The drop to a single production shift is unlikely to impact employees at Sindelfingen, who can be moved to Hall 46, where the E-Class and GLC are still produced in a three-shift operation.
However, temporary workers may be let go, a source told Automobilwoche.
There is no sure way to predict when Factory 56 will return to a two-shift operation, though an upswing in S-Class vehicles typically occurs with a facelift and introduction of new technology. A refresh is planned for 2025.
Audi is facing slow sales of its top battery-electric car, the Q8 E-tron, and may shutter the plant in Brussels where it is built.
Vehicle production at Mercedes's plant in Sindelfingen.
Mercedes S-Class production reduced to one shift on slow demand
Nathan Eddy, Michael Gerster | August 20th 2024 6:18 AM
BERLIN — The Mercedes-Benz S-Class will for the first time be produced in just a single shift in the automaker’s Factory 56 in Sindelfingen, Germany.
The fully digitalized plant, which opened four years ago, builds the company’s lucrative S-Class and the full-electric EQS, along with the Maybach and AMG brands.
The factory has operated with at least two shifts since it opened, but the nearly 1,500 employees must prepare for cutbacks upon return from their August vacation period.
“It is planned to transfer production at Factory 56 to a single-shift operation in the fourth quarter and to deploy some of the employees in other production areas of the plant,” a Mercedes spokesperson told Automotive News sister publication Automobilwoche.
The plant’s capacity has been underutilized for months as weakness in the upper part of the luxury market persists — a decline reflected in the company’s second quarter sales figures.
Combined sales of Mercedes’s top four models — the S-Class, EQS, the EQS, and GLS — were just 33,400 units between April and June, a nearly 25 percent drop compared with the previous year’s sales of 44,200 units.
The share of the top segment in total sales fell to 14 percent from 16 percent, resulting in the profit margin in Mercedes’ car business in the second quarter falling to 10.2 percent from 13.5 percent.
S-Class sales fell in all Mercedes’s top markets during the first half, according to data specialist Marklines.
Sales of the upper-premium model dropped 13 percent to 10,430 in China, 19 percent to 5,026 in the U.S. and, 27 percent to 4,249 in Europe, according to Marklines.
Mercedes CEO Ola Kallenius is facing challenges on multiple fronts, from China’s price war, a faltering focus on high-end models and high development costs.
Catastrophic blow to suppliers
The slump is also affecting suppliers, with the unnamed head of one major S-Class interior components supplier telling Automobilwoche that the reduction in vehicle production is a “catastrophe.”
A Mercedes dealer from the Stuttgart region reported that he last sold an S-Class in the fall of 2023, while another dealer has an EQS demo vehicle with just 5,000 km (3,100 miles) still sitting on the lot for weeks, priced at just under €82,000 ($90,400).
The price for a BEV vehicle with that configuration lists for more than €130,000 ($143,400).
The drop to a single production shift is unlikely to impact employees at Sindelfingen, who can be moved to Hall 46, where the E-Class and GLC are still produced in a three-shift operation.
However, temporary workers may be let go, a source told Automobilwoche.
There is no sure way to predict when Factory 56 will return to a two-shift operation, though an upswing in S-Class vehicles typically occurs with a facelift and introduction of new technology. A refresh is planned for 2025.
Audi is facing slow sales of its top battery-electric car, the Q8 E-tron, and may shutter the plant in Brussels where it is built.