Mercedes is considering moving the production of the company’s entry-level A and B-Class cars to developing countries. While both cars have been a sales success for Mercedes-Benz , their slim profit margins have Mercedes’ execs looking for ways to boost the cars’ profitability. The production shift would also allow the A and B-Class cars to enter into new markets.
Mercedes COO Rainer Schmückle said that the company is not looking to exit the small car market and will likely move production to Eastern Europe or Asia. Schmückle continued by saying the new cars would hit the market in 2011 and remain front-wheel drive.
According to AutomobilWoche, Mercedes hopes to see a 5-6% sales growth as its entry-level cars become available in developing areas. Mercedes’ biggest challenge will be pricing its cars competitively within the market.
Mercedes currently has four assembly plants in Southeast Asia and one in India.
