Mercedes-Benz appears to be changing its strategy again. This time, the goal is to revitalize sales in North America with the company’s new CEO suggesting a target of 400,000 annual sales by the end of the decade. That seems simple enough for an automotive brand the size of Mercedes. However, leadership wants every single one of those vehicles to be attributable to retail sales.
Adam Chamberlain took over as the chief executive of Mercedes-Benz USA in July of 2025 and it’s customary for fresh leadership to issue some kind of bold statement about a company’s direction. But, according to Automotive News, this is to be accompanied by one of the most aggressive product offenses in the brand’s 138-year history.
For some reason, this is supposed to include a 1000-horsepower EV AMG GT, followed by an all-new AMG-badged crossover in 2027. While there has also been promises of more V8s, and other larger combustion engines, electrification has not been taken off the table.
For example, the upcoming CLA sounds as though it will only be available as either a hybrid or all-electric model. We also know that dealers have at least previewed all electric versions of most of the brand’s crossovers this year.
But we’re also hearing promises that Mercedes will start to repackage vehicles into more traditional trims as it moves away from individualized options. That sounds like it may also result in nullifying the subscription model to an extent. But we’ll have to wait and see how that manifests.
Chamberlain suggested that the uptick in U.S. volume should come by way of updated versions of the GLC, GLE, and GLS — which he expects to comprise 55 percent of the market’s annual volume. As the German automaker hunts for an uptick in volume, production of those models will likewise continue to shift toward North America.
Interestingly, this is all despite Mercedes-Benz doing rather well on our market of late. The assumption is that it has continued losing ground to BMW (among others) and would simply like to get one over on its main rival. However, we can assume a good portion of MB’s business in the United States are fleet sales. While the company tries to avoid giving a detailed breakdown between, we know that it sells American’s about 60,000 vans annually and a good number of those are commercial deliveries. That’s out of a grand total of 375,982 units sold in 2024.
This means pushing retail volumes without sacrificing lucrative fleet sales — which is almost the complete opposite strategy it was pushing just three years earlier.
Over the last decade, Mercedes has revised its corporate strategy more often than celebrities change hairstyles. Among the most recent were pivoting the company’s focus toward higher-margin segments, requiring it to eliminate some of its entry level models. While this has been something most automakers have engaged in since the early 2000s, Mercedes-Benz was already synonymous with premium cars and owned the hyper-luxe Maybach. It wasn’t obvious how far up the ladder it could realistically go, especially during a time where many would-be customers are already in debt up to their eyeballs.
For almost a decade, we’ve heard most automakers (not just Mercedes) discussing the “power of storytelling” or and stressing the importance of strategic partnerships as a way to reinforce a brand’s identity, rather than diluting it. MB was discussing both as key factors in its corporate strategy as late as March of this year. But it was ultimately empty corporate fluff that was designed to make the proles think the automaker was on the cutting edge of some novel industrial philosophy.
Like most European brands, Mercedes-Benz likewise became obsessed with electrification and launched a slew of “EQ” models. But the brand’s flagship EQS, which was designed to supplant the venerable S-Class, has been an absolute sales disaster and the rest of its EV lineup hasn’t done much better.
These are issues a lot of automakers have been confronting, particularly those with at least one foot in the premium space. Mainstream brands are now encroaching on their territory while emissions regulations are making it harder for them to field large, powerful engines without incurring financial penalties. Luxury marques assumed the solution to this would be tech. Electrification could fill in the performance gaps while touchscreens and connectivity wrapped up the cutting-edge nature automakers wanted to put forward — offering new avenues for revenue via the subscription model.
But consumers are getting fed up with subscriptions and are starting to see touch controls as the opposite of luxurious, something MB leadership has actually acknowledged before. Buyers have grown aware that they’re cheaper to produce than knobs and buttons while also being twice as difficult to use while driving. Add to the fact that basically every brand in the world thought it could go upmarket during a period where the middle class is evaporating in most Western nations and brands like Mercedes are confronting some serious headwinds.
This is a big part of why you see German luxury nameplates catering so heavily toward China and the Middle East these days, as both are seen as growth markets. Interiors are not made to cater toward your tastes like they were in the past. The Chinese don’t seem to mind screens because basically nobody in the country would have even owned a car prior to the early 2000s. Functional ergonomics don’t matter as much when you’ve got nothing to compare them to.
Meanwhile, the interior couture of the automaker has only grown more conspicuous in the hopes of appealing to Middle Eastern clients. Today’s Mercedes are often previewed with interiors in stark white with contrasting metal accents and a heavy doze of colored ambient lighting.
But chasing margins and designs that would appeal to other markets hasn’t done the company many favors in the West. In Europe, Mercedes’ annual sales went from 850,752 in 2019 to 684,027 in 2024. Annual volumes have been more stable in the United States, even if MB doesn’t sell quite so many vehicles in North America. But it is assumed that the brand will see a modest decline in volume by the end of 2025, matching what we’ve seen on the global market.
Based upon what we’re now learning, it sounds like that leadership is getting worried about losing customers at home. Your author has long maintained that the next great automaker will be the one that builds reliable cars that are user serviceable at an affordable price. This theory is based on little more than every other brand gradually moving away from volume to chase increasingly lofty per-vehicle margins.
If you’re dubious, consider periods of economic recession. Leading up to the 1930s, most automakers thought the play was to cater toward the luxury segment by building increasingly opulent and expensive vehicles. When the Great Depression took hold, the survivors were the brands that built small, affordable cars and any manufacturers that were already big enough to weather the financial storm. The rest went bankrupt or were absorbed by the larger entities.
In 1973, America was enduring the oil crisis that quickly pivoted to a generalized economic downturn. Large engines had simultaneously been neutered by government regulation, handicapping the oversized vehicles Detroit previously counted on for sales. The solution came from Japan, which was producing small, simple cars with superior fuel economy and lower price tags.
This is often how it goes. When the going gets tough, volume automakers with sound products tend to do rather well. But I certainly didn’t expect Mercedes-Benz being among the first nameplates to vocally embrace the volume ethos when I made that prediction. Still, the German automaker continues stressing the viability of all-electric vehicles on a market that is lukewarm on them at best. It’s hard to say if those are just the customary empty promises that stem from the automotive sector or something more meaningful.
[Images: Mercedes-Benz]
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