Why are Mercedes Cars so Expensive?

Paul Salzman says,

Mercedes-Benz old motto was “Engineered like no other car in the world.” This is entirely true, as they are very deliberate (sometimes stubborn) with their design philosophies. That said, 1996–2002 were the dark years of Mercedes cars. Mass-market appeal and volume production won over the over-engineered, long-lasting vaults they built in years prior. The Chrysler “merger” debacle caused them to lose focus on their product-first, customer-first philosophy.

Dieter Zetsche, the current CEO has done a magnificent job of returning the company back to its former glory. 

Mercedes-Benz old motto was “Engineered like no other car in the world.” This is entirely true, as they are very deliberate (sometimes stubborn) with their design philosophies. That said, 1996–2002 were the dark years of Mercedes cars. Mass-market appeal and volume production won over the over-engineered, long-lasting vaults they built in years prior. The Chrysler “merger” debacle caused them to lose focus on their product-first, customer-first philosophy.

Dieter Zetsche, the current CEO has done a magnificent job of returning the company back to its former glory. The best or nothing was their very old motto that he revived to drive them into excellence.

These days, their products are hard to beat. They are once again the pinnacle of design and luxury in their respective classes. The new S-Class models are simply amazing in every measurable category. They make a Tesla look and feel like a cheap Kia. The attention to detail, build quality and technological achievement is altogether a new level of excellence. The new interior design and build quality knocks Audi off their leadership perch in this area. The best or nothing, indeed.

That said, driving the brand new VW Golf back-to-back against a CLA may surprise. The Golf is a remarkable car for the money and an example of where you pay a bit extra for that 3-pointed star.

Yet in their core markets: E-Class and S-Class, Mercedes are unbeatable. Also, Mercedes has innovated more than any automaker in the area of safety. Airbags, ABS brakes, seat belts, crumple zones and many other safety features were either invented or brought to market by Mercedes-Benz first.

So in the end, you’re paying for heritage, design, deeper engineering, materials, long-lasting, safety and prestige.

Plus, they did invent the automobile.

“It’s due to several reasons.

First is the brand. Most cars made today can have heated seats. Even a basic Toyota. But when someone asks you what you drive, the word “Mercedes” makes a massive impression.

Next is production. Mercedes makes most of their own parts (save a few), in Germany. It’s much more expensive to produce there rather than somewhere else with cheaper labor. But this generally results in higher quality.

Luxury. No words can define this. Yes, it’s real.

If anything else, its also the attention to detail. There are hours of work put into crafting each individual AMG engine. Only one person does the whole entire engine by hand. They even sign their name on it when they finish.

hope this helped!

I do not own any of these pictures.

EDIT: I’d like to add customer service. When you go to a Mercedes Benz dealer, whether it’s to service your car or to buy a new one, you can expect employees to be patient, dedicated, and experienced.

Also, it’s worth mentioning that when you buy a car, you not only buy the car itself, but also the history of Mercedes Benz and its accomplishments. You buy all that the company stands for, along with its motto of “The best, or nothing.”

Kevin Wortman say,

An unpleasant truth is that part of it is the higher profit margin that Mercedes-Benz commands on its products. The margins on luxury cars are higher than on mass-market brands like Toyota. Benzes are status symbols and the consumer pays for that in the form of margins.

M-B (and also BMW and to some extend Audi) use short product cycles of 5–8 years for their platforms and engines. On the positive side, that means their products always use the latest technology and are early adopters of new exciting features. On the negative side, all the R&D and factory tooling costs of creating a new design aren’t spread very far. More conservative (ahem, cheap) companies like GM and Toyota will stretch a proven engine or platform out for 20 or even 30 years, with minor updates, when they can.

Major components like engines, transmissions, and infotainment systems are premium and unique to the brand. M-B does not share parts with cheaper cars. Audi shares some under-the-hood components like engines, computers, etc. with the cheaper Volkswagen brand, which means those components have to be engineering to cost and cannot be the absolute best of the best. The same thing happens with Lexus/Toyota, Cadillac/Chevrolet, and other multi-brand manufacturers. On a Benz, every part is designed to be a Benz without compromise. A downside is that replacement parts are costlier because there are fewer economies of scale.

Finally, they’re engineered for high performance and fitted with rich materials and all that adds up. If you compare a C300 to a mass-market car of similar size, like a base trim Ford Fusion/Mondeo, you’ll see that the Mercedes has more horsepower, larger wheels, larger brakes, more airbags, uses fine leather and real wood instead of cloth and plastic panels, higher spec speakers, and so on. The C300 costs almost twice as much, though.

IMO, a top-trim volume brand, like the Ford Titanium or Subaru Limited trim level, is a better buy for most consumers. Those cars come close to a Mercedes in every measurable way and are a lot cheaper to buy and operate. But, some people want the prestige of the brand, or to know they have the very best money can buy.