Mercedes S-Class Cuts Production Due To Crisis In Luxury Market

Mercedes will cut production of the Mercedes S-Class luxury limousine at its state-of-the-art Factory 56 plant in Sindelfingen due to falling demand following the luxury goods crisis.
 

Since opening the modern Mercedes Factory 56 plant in Sindelfingen, Germany, four years ago, the Mercedes S-Class flagship has been produced in two shifts, and now Mercedes has to cut production to one shift.
 
The fully digitalized Factory 56 plant is a state-of-the-art facility where Mercedes produces its most expensive models: the S-Class, EQS, and various Maybach and AMG models.The switch from two-shift to single-shift working is planned for the last quarter of this year, which will affect about 1,500 people who will be relocated to other production departments at the Sindelfingen plant.
 
Sales of the Mercedes EQS fell by over 50% in the first 6 months of 2024 to just 7,000 units from 14,100 units in the same period of 2023. If the drop in Mercedes EQS sales was somewhat expected given the inflated prices and the only 400V platform, the drop in Mercedes S-Class sales is a big surprise.
 
Sales of the Mercedes S-Class fell to 28,100 units in the first 6 months of 2024 globally, down 25% from the same period in 2023. In China, sales fell by 13% to 10,430 units, in the US by 19% to 5,026 units, and in Europe by 27% to 4,249 units.
 
In the second quarter of 2024, sales of Mercedes’ top four models – the EQS, EQS SUV, S-Class, and GLS – fell 25% to 44,200 from 33,200 units.
 
The drop in sales of the S-Class is not due to its qualities but to the international economic climate created by the crisis in the luxury market. Normally, Mercedes S-Class sales record a drop before the launch of facelifts but this time the drop is recorded well ahead of the facelift planned for the second half of 2025.
 
The luxury product crisis comes at a time when Mercedes CEO Ola Kallenius has shifted the brand’s strategy, emphasizing the development of the AMG, Maybach, and G-Class luxury range at the expense of higher-volume models.