SWOT Analysis of Mercedes-Benz 2020


NameMercedes-Benz AG [1] (Subsidiary of Daimler Group-Parent Company)
IndustryAutomotive [1]
Founded1926 [1]
HeadquartersStuttgart, Germany [2]
Chairman of the Board of Management (CEO)Ola Källenius [2]
Revenues€ 108.7 million (Combined Revenues of Mercedes-Benz Cars Division & Mercedes-Benz Vans Division) [2] € 172.7 billion (Daimler Group) [2]
Net Income€ 2.7 billion (Daimler Group) [2]
Leading CompetitorsBMW, Ford, GM, Honda, Hyundai, Isuzu, Kia, Mazda, Nissan, Paccar, Subaru, Suzuki, Toyota, Volvo, Volkswagen [2]


Company Overview

Mercedes-Benz AG is in charge of the two business divisions of Daimler Group (parent company), namely: the Mercedes-Benz Cars and Mercedes Benz Vans. The company is one of the leading premium passenger car manufacturers in the world. It has 173,000 employees and has over 40 manufacturing locations globally. As of 2019, the company was able to sell almost 2.4 million units of cars and more than 438,000 units of vans. The company offers a wide range of passenger cars from urban microcars to luxury cars like Mercedes-Maybach, to sports cars like the Mercedes-AMG. The company also offers a full line of vans from small Citan vans to large vans like Sprinter vans [3]. Like its parent company, Daimler Group has 291, 770 employees as of the 3rd quarter of 2020. The parent company has also sold 772, 700 cars and commercial vehicles as of the 3rd quarter of 2020 [4]. Daimler Group has 5 divisions in total, namely: Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses, and Daimler Mobility. Daimler AG is one of the world’s leading suppliers of both premium and commercial vehicles. Daimler Mobility is the business division that offers financing, leasing, fleet management, investments, credit cards, insurance brokerage, and innovative mobility services. Daimler Trucks handles the development and production of vehicles under the following brands: Mercedes-Benz, Freightliner, Western Star, FUSO, and BharatBenz. As of the end of 2019, it has 30 production sites all over the globe. Daimler Buses division offers city and intercity buses, touring coaches, and bus chassis. It is a leader when it comes to producing buses that weigh more than 8 metric tons [2].  



Mercedes-Benz Strengths 2020:

  • The value of the company’s brands is strong and well-recognized.

    The Interbrand consulting firm recognized Mercedes-Benz as the top 1 premium brand in the automobile sector in the “Best Global Brands 2019.” Mercedes-Benz is also considered one of the most valuable brands in the world [2].

  • Customer-focused approach.

    The company caters to the needs of its customers through its customized products and services. This focus is also reflected in the three business units of the company, namely: Mercedes-Benz AG, Daimler Truck AG, and Daimler Mobility AG. The company utilizes “special Mercedes-Benz moments and technologies” to make their customers feel special and connected to their private cars.  [2]. 

  • Well-supported and highly capable research and development team.

    The company has invested heavily in its R & D because it believes that this will solidify the company’s future. The company intends to invest almost €19 billion in R & D by the year 2020-2021. This will support the creation of new products, innovation, and technology [2].

  • The use of “cash-preservation measures” and cost control efforts, especially during the pandemic.

    The company’s key figures improved during the 3rd quarter of 2020 compared to the 1st quarter of 2020 due to its extensive efforts to combat the drastic effects of the COVID-19 pandemic. The company earned €40.3 billion in the 3rd quarter of 2020. This however is still lower compared to the €43.3 billion revenues earned in the 3rd quarter of 2019. Significant improvements were seen as well in terms of the company’s net profit for the 3rd quarter of 2020 (€2.2 billion compared to €1.8 billion in 2019 3rd quarter) [5]. The company’s stock price seemed to recover as well from a big dip during March 2020 [7]. 



Mercedes-Benz Weaknesses 2020:

  • The company had a history of recalls.

    In the last years, the company had recalled some of its units due to issues on airbags, headlights, defects in power steering, and poor wiring in the fuel system [6]. 

  • The “dieselgate scandal”.

    The company was previously involved in a controversy regarding installations of software in its 250,000 Mercedes cars and vans to cheat air pollution tests. It was reported in Sept. 2020 that the company agreed to pay $1.5 billion as a settlement with the U.S. government. The company has also agreed to pay another $700 million as a settlement for a class-action lawsuit [8].


Mercedes Benz Opportunities 2020:

  • The China market for electric vehicles.

    As announced previously by China, the country aims to achieve carbon neutrality by 2060. The country also aims to have CO2 emissions peak before reaching the year 2030. This was in response to global climate change [9]. The company plans to focus as well on producing a full range of electric Maybach models for the China market [10]. The company can take advantage of this market by producing electric cars that are better in design and performance. 

  • More partnerships or collaborations.

    The company can partner with other leading manufacturers of electric cars to create new and unique products. The possibilities are endless and this move might lessen the required resources if the company decides to share the project efforts with a company that already has the capability and resources.

Mercedes-Benz Threats 2020:

  • Tighter regulations intended to lower the emissions coming from vehicles and decrease the consumption of fuel.

    If countries will continue to impose stricter regulations on these, companies found to be in violation will be required to pay penalties and fees and it will also be more difficult to penetrate other potential markets. Adapting to this kind of regulation would also require the company to spend more to meet the standards and regulations [2]. 
  • Potential closures of some business partners.

    Because of the COVID-19 pandemic, some business partners may encounter financial difficulties and it is still uncertain until now as to what is ahead.  For example, if one of the company’s business partners or suppliers closes or ceases its operations, it will also impact the business when it comes to its supply chain and production.

Mercedes-Benz SWOT Analysis Conclusion:

  • Overall, the company already has a strong brand value and the resources needed for it to explore new opportunities. The challenge however is in the continuing innovation and disruptive approaches of competitors or any potential new entrants in the automotive industry. The company has to make sure that it can improve its share in the market or tap new markets to expand its reach. Focus on quality and performance improvement is also a must.

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References

1.“Corporate history.” Mercedes-Benz,

2.“Daimler Annual Report 2019.” DAIMLER

3. “About us.” Mercedes-Benz,

4.”Current Group Key Figures.” DAIMLER,

5. “3rd Quarter Results 2020.” DAIMLER

6.”Mercedes-Benz Recall History.” Kelley Blue Book THE TRUSTED RESOURCE,

7.”Daimler AG (DAI.DE).” yahoo!finance,

8. “Daimler to pay $1.5bn over emissions cheat claims in US.” BBC, 14 Sept. 2020,

9.McGrath, Matt. “Climate change: China aims for ‘carbon neutrality by 2060.’” BBC, 22 Sept. 2020,

10.”Luxury carmaker Maybach has high ambitions for China.” yahoo!finance, 20 Nov. 2020,

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