Daimler brings revenue revival within the new Mercedes-Benz S-Class

FRANKFURT – On Wednesday, Daimler introduced the brand new mannequin of its luxurious Mercedes-Benz S-Class sedan, with which the German carmaker is predicted to return to profitability subsequent 12 months after the coronavirus pandemic has throttled demand for high-end autos .

For many years, Daimler has introduced a brand new S-Class onto the market each seven years. Nevertheless, this 12 months’s launch of its most worthwhile mannequin is especially necessary for the corporate because it tackles the aftermath of the pandemic and the expensive swap to electrical vehicles.

“The S-Class is a crucial picture driver and, measured by the margin, the most important supply of revenue,” says Frank Schwope, an analyst at Norddeutsche Landesbank.

CEO Ola Kaellenius leads a cost-cutting drive after Daimler posted a 30% drop in gross sales and a loss earlier than curiosity and taxes of 1.68 billion euros ($ 2 billion) within the second quarter.

Kaellenius pointed to a restoration in demand in July, particularly for top-of-the-range Mercedes-Benz fashions and electrical autos. Analysts have additionally pointed to a powerful restoration in China, the principle marketplace for Mercedes-Benz.

Daimler might promote 95,000 S-Class vehicles in 2021, which, with costs of greater than 100,000 euros every, might contribute greater than 2 billion euros to the corporate’s earnings, estimates Daniel Schwarz, auto analyst at Financial institution Mainfirst.

Daimler doesn’t go into element in regards to the profitability of assorted fashions, however analysts estimate the margin of the S-Class at 15-20% of gross sales.

The S-Class ought to profit from being the most recent premium mannequin in the marketplace because it competes with the BMW 7 Sequence and Audi A8, which have been launched in 2019 and 2017.

Daimler may even launch the electrical model of the S-Class referred to as EQS subsequent 12 months, although analysts counsel that this would possibly not be the identical moneymaker for the corporate.

The S-Class affords workers who’re apprehensive about their work as a result of pandemic and the swap to electrical autos, some comfort – it’s manufactured in a model new plant in Sindelfingen in southern Germany close to the Daimler headquarters.

The manufacturing facility price 730 million euros and greater than 1,500 workers will work on an ergonomic meeting line that Daimler says will probably be 25% extra environment friendly than on the earlier location.

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