Mercedes-Benz, along with several other automakers around the world, have struggled with vehicle production and sales.

Through HT automatic office
13 Feb 2022, 11:28

Mercedes-Benz recorded a 5% drop in sales in 2021 due to several factors.

German luxury car brand Mercedes-Benz hopes the supply chain bottleneck that has severely affected the global auto industry will not ease until the second half of this year. The automaker also expects high raw material costs and semiconductor shortages to continue to affect it as it meets strong market demand in 2022.

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Mercedes-Benz Chief Financial Officer (CFO) Harald Wilhelm said Friday that chip capacity is returning and the current semiconductor shortage will ease in the second half of this year. He also said that a good portion of raw material costs were already locked in.

“It’s a fact that there will be a headwind on commodities, so I think we’ll need the volume lever to mitigate it and fight it,” Wilhelm said. He also added that the luxury car brand will try to see what can be done beyond 2021 price-wise. However, he also pointed out that pricing itself will not be enough.

The automaker revealed in January that it had recorded a 5% drop in sales in 2021, losing its crown for the first time in five years to BMW as the premium automaker with most vehicles sold. One of the main reasons for the drop in sales was supply chain bottlenecks. The supply chain problem, such as the shortage of automotive semiconductors and high raw material procurement costs, has pushed up the price of vehicles. In addition, production being affected, the waiting period for vehicles is also extended. These have an impact on vehicle sales.

Mercedes-Benz isn’t the only automaker struggling due to a shortage of semiconductors and high raw material costs. Several other car brands around the world have also witnessed similar issues.

Date of first publication: February 13, 2022, 11:28 am IST