Published on March 2nd, 2018 | by Subhash Nair0
Mercedes-Benz Malaysia’s Strategy for Plug-in Hybrids Explained
Mercedes-Benz Malaysia has been extremely focused and driven with its plug-in hybrid powertrain strategy since it began the push with its C 350 e in 2016.
With further electrification in the pipeline, we sat down with VP of Marketing and Sales at the company, Mark Raine, to talk about their Plug-in Hybrid strategy. So far, their Plug-in Hybrids have been positioned as the most expensive and best-equipped variants of the locally-produced limousines.
With BMW trying a different approach with their current 5-Series, we asked Mr. Raine if his strategy would change too.
One line summed it up nicely:
“We will continue to spec Plug-in Hybrids as top-of-the-line models, definitely. I completely believe that’s the right way.”
Rather than retype the whole interview transcript, here are his reasons in a more condensed, understandable form. A lot of this is conjecture, but it’s based on the reasons he gave us (which are in bold)
“Plug-in Hybrids are not cheapskate cars… it’s more complex technology”
There are consumers and producers out there who take the fuel savings associated with hybrid cars to mean that these types of vehicles are meant for low-cost applications. The truth is, PHEVs, especially those produced by premium marques like Mercedes-Benz, involve very complex technology and are NOT cheaper to produce than their petrol counterparts. Offering a base-model or low-spec plug-in hybrid may send the wrong message to customers; they may end up feeling like standard engines are the better option, as they are more expensive and thus more exclusive.
Mark Raine was quick to point out that the previous generation W212 E300 Bluetec Diesel Hybrid was an entirely different kind of vehicle. The reason for the lower price and higher spec on that particular model: the W212 was coming to the end of its product lifecycle. Mercedes-Benz Malaysia also had to overcome the reservations most customers had against diesel engines. And of course, that wasn’t a Plug-in Hybrid, it was a simpler, milder form of electrification.
“We’d rather use [the tax exemption] to add value to the product”
Although they are more expensive than petrol cars to produce, in Malaysia, hybrids of this sort get import and excise duty exemptions. This is why some manufacturers, like Honda with their Jazz and City and BMW with their 5-Series, can offer hybrids as cheaper alternatives to a higher spec petrol model. Mark Raine’s strategy is more focused on using these tax exemptions to add value rather than drop price. Looking at both the C 350 e and E 350 e, both are filled to the brim with features.
So, a customer who walks in ready to spend RM287,888 on a C 250 can look at the C 350 e and see that for just RM12,000 more he gets a car with a larger infotainment display, larger rims, air suspension, better brakes, a surround camera, as well as the added performance and 30+ kilometres of petrol free driving per charge. For just a 4% increase in price, the amount of value added is immense.
The strategy must work throughout the portfolio
As we explained above, there’s a logical method to how Mark and his team position their hybrids. Every jump in price corresponds with a jump in performance, kit and perceived value. For Mercedes-Benz this strategy works across their entire product portfolio, whether or not plug-in hybrid technology is available. Vehicles like the C- and E-Class start with the internal combustion engine as standard, then add plug-in hybrid technology further up the ladder, and finally get the AMG-engineered V6 and V8 Biturbo powertrains at the very top end.
An easy and objective metric to measure is the 0-100km/h performance of each variant of the C-Class. For RM228,888, the C180 takes 8.5 seconds. For RM299,888, the C 350 e takes 5.9 seconds. For RM499,888, the C 43 4MATIC takes 4.7 seconds and for RM698,888, the C 63 takes 4 seconds. Of course, many other (more pertinent) factors exist but they are less fun and more difficult to compare.
“Hybrids Need to Get Away from the ‘Boring’ Image”
There exists an idea that hybrid cars are boring. Perhaps the earlier, popular Japanese models instilled this idea, and it’s quite a dangerous idea for car makers now that hybrids are a must-offer in most markets.
So, MBM uses these 5 factors to draw elevate their hybrids:
Performance – The C 350 e and E 350 e are the fastest locally-produced Benz vehicles with the electric motor capable of 340Nm of torque
Value Perception – These variants come with little touches that elevate them. Blue brake calipers and headlight accents, Nappa leather (E 350 e). The hybrids feel significantly more premium
Features – As top-of-the-line trim levels, these PHEVs get everything thrown in from Burmester sound systems to Airmatic suspension
Fuel-efficiency – Of course, there are many customers who are excited to complete whole journeys on nothing but electricity.
Sporty design – Both the C- and E-Class can be equipped with AMG-Line interior and exterior packages.
This is the 2nd part of a series of articles that were based on our interview with Mercedes-Benz Malaysia VP of Sales & Marketing for Passenger Cars. More will be published in the coming weeks.