Mercedes is relinquishing its involvement in the taxi industry.
For decades, Mercedes limousines have been the go-to vehicles for German taxi drivers. However, the sales of popular models like the E- and B-class have taken a nose dive this year, with Mercedes CEO Källenius leading the charge for this change.
Back in 2019, Mercedes was the undisputed king of the car market in Germany, with over half of all taxis on the road bearing the Mercedes badge. Fast forward to present day, and Mercedes has taken a drastic turn, as reported by "Handelsblatt," essentially blessing farewell to this market segment. The number of Mercedes cars registered for taxi use has plummeted by over 70% in the first eight months of this year.
The drop in sales for the E- and B-class models is even more pronounced, with a staggering 90-95% decrease. The only Mercedes model that's still finding favor with taxi companies is the Mercedes Vito van. According to Dataforce market research data, cited by "Handelsblatt," this is the only Mercedes model that's seeing significant registrations for taxi use.
While the taxi market in Germany has been on a downward spiral in recent years, Mercedes' decline is particularly steep. In 2019, 6,927 new taxis were registered, of which 3,627 were Mercs. However, in the first eight months of this year, only 497 of the 3,756 newly registered taxis were Mercedes, meaning its market share has plummeted from over 50% to a mere 13%.
Now, Volkswagen's Touran and Caddy models have taken the crown as the new leaders in the German taxi market. Toyota has also outpaced Mercedes in the taxi registrations race.
This decline isn't a fluke, but a deliberate move by Mercedes CEO Ola Källenius. As part of the company's new luxury strategy last year, Mercedes effectively cut off special versions and financing benefits for the taxi industry. The company confirmed to "Handelsblatt" that it no longer produces taxi models straight from the factory. Taxi companies now have to get their Mercedes vehicles converted in external workshops before they can be used for passenger transport.
As Mercedes put it, "the sales and installation rates in passenger transport are not sustainable enough for a viable factory solution." The taxi industry was simply not big enough and the margins were too thin for Mercedes to make a profit, despite its longstanding market dominance. A Mercedes manager was also quoted saying, "taxis just don't fit our luxury claim."
The German car manufacturer, Mercedes, once held a dominating position in the taxi market in Germany, with over half of all taxis on the roads bearing its badge. However, under the leadership of CEO Källenius, Mercedes has chosen to abandon this market segment, resulting in a significant decrease in Mercedes car registrations for taxi use.
