Dimitris Psillakis, CEO of Mercedes-Benz USA, is overseeing an automaker undergoing two transitions. One is similar to that faced by every other OEM; the transition to an electrified line-up.
The other is specific to Mercedes-Benz, namely the thinning of its entry-level models in the U.S. market as the brand reasserts its identity within upper-end vehicle segments. The move is a repudiation of the marque’s move down-market, begun under former Daimler CEO Jürgen Schrempp and continued under his successor, Dieter Zetsche.
TheDetroitBureau.com recently caught up with Psillakis during Monterey Car Week and had a chance for a brief chat, which has been edited for clarity and length.
TheDetroitBureau.com: There’s been a de-emphasizing of the lower end of the line-up by Mercedes-Benz. Are we going to continue to see that as you further focus on premium products?
Dimitris Psillakis: We are moving forward to emphasize the premium end because that’s where Mercedes-Benz belongs. The entry point is a more congested space, and the air is thinner. And since we want to have a pure play luxury brand, we want to move up. We want to focus our resources not in a huge range of products, but reduced to a narrow range of products addressing this luxury end of the market.
TDB: In the last 5-to-10 years, there’s been a noticeable change in the appearance of Mercedes-Benz vehicles. They seem sleeker, more sophisticated, more cosmopolitan.
DP: I totally agree. I would say on the one hand, it’s more elegant, and at the same time lifestylish and distinguishable. So it’s not provoking. This is not the car which goes to the market. But if you see our designs, they are very homogeneous, very harmonic, bringing the sense of luxury, but also very techie. So inside, what is below the shell, it’s extremely advanced technologically.
TDB: Having Maybach as a top trim level on top brand seems to be working a bit better for you than having it as a separate brand.
DP: I think it’s addressing exactly what we want to do bring two brands up to the luxury end of Maybach. We can offer luxury, but also exclusivity as you see some here with the EQS Maybach SUV. And Maybach also is sustainable, it’s a brand persuing sustainability as we move into the electric SUVs, and with a hybrid version.
TDB: Sales of the Metris, while not exactly strong, but have been growing year after year and it seems to have been slow to find it audience. Yet it was finding an audience. Why pull it out of the market?
DP: We’re not pulling out of the market; we’re taking out the gasoline engine. This is basically where the market is moving. And don’t forget that soon, in the next couple of years to come, we’ll have electric products. We’re streamlining our portfolio based on demands.
TDB: So you’re selling all the electrics you can build right now.
DP: We sell every electric but also every internal combustion we can build. Nowadays, supply is the constraint. But you’re absolutely right; we have an increased demand on electric vehicles that we cannot fulfill. We come up with more models so you’re going to see more use of them, more products like the EQB and EQS SUV are coming to the market within the next four weeks. So we’ll be able to offer more product.
TDB: So the C-Class might be your lowest vehicle here in the U.S., with the slimming of the product portfolio.
DP: Yeah, basically CLA on the sedan, GLA on the SUV side will be our entry luxury models for the U.S. market.
TDB: You had a pretty diverse range at the lower end of the market, which was surprising for a luxury brand.
DP: Correct. Now we’re streamlining, specially designing for the U.S. market, which is de facto high engine and heavier on the luxury end. We’re pushing up.
TDB: How is your customer changing?
DP: He’s much more knowledgeable on the product, so he comes better studied on the product because he has access to information channels. But at the same time, the customer is looking more and more for convenience. And this is what we try to give, so we’re offering convenience of online information, online retail, if you want to go this this way, or offline with customer-experience-based dealerships. We are moving fast towards this direction of making our retail environment more attractive, more digital.
TDB: As some competing luxury brands are really pushing into lifestyle branding, residences and furniture and those types kind of ventures, is that something that Mercedes is considering or looking at?
DP: I think our focus is cars, and car products. At the moment, we don’t have any interactions with furniture or anything else.