Mercedes plans price spike on certain models image

Daimler’s Chief Executive Officer Dieter Zetsche disclosed that Mercedes-Benz will start lowering its sales incentives and even increase prices on some models as demand outgrew the actual supply.

As fourth-quarter sales for Mercedes’s small vehicles jumped 44 % and demand for the new S-Class flagship climbed 43%, the Stuttgart, Germany-based Daimler also forecast yesterday its 2014 operating profit from ongoing operations will surge past the 7.9 billion euros ($10.7 billion) it made last year.

As the brand’s deliveries went up by 15 % in January, Mercedes-Benz is preparing for the sales start of its best selling model, the refreshed mid-sized C-Class sedan, while also outing a new small crossover, the GLA. The German manufacturer will also debut the B-Class electric version in the US and the coupe derivative of the S-Class.

The company’s CEO is also now focusing on improving the unprofitable Smart city car brand by partnering with Renault to launch new models.

“Costs are going down while content and performance are significantly improving,” Zetsche said today of Smart, adding that he thinks the brand could become profitable in the near future.

Alongside Smart, the Mercedes-Benz cars unit has been set the goal of achieving cost cuts of around 2 billion euros in the two years through 2014 and Daimler announced the division already saved 800 million euros last year, beating internal estimates.

Via Bloomberg