Mercedes unveils luxury van to win over wealthy Chinese buyers

Mercedes-Benz Group unwrapped a luxury electric van aimed at bolstering sales in China, where fast-moving local manufacturers are encroaching on its premium stronghold. The new VLE will cost from around 66,000 euros ($76,864) to roughly 130,000 euros for the top-end trim when it goes on sale early next year, Mercedes said Tuesday. The manufacturer has upgraded the model with reclining seats, a large rear entertainment screen and optional wine coolers — turning what once was a practical people mover into a rolling executive lounge. That shift is by design. The van is meant to win over affluent families and chauffeur services in China, where high-end multi-purpose vehicles have become status symbols. Like Porsche and BMW, Mercedes is struggling with declining sales in the world’s biggest car market as local manufacturers like BYD and Huawei Technologies push into the luxury space. “I am confident this is a product Chinese customers will love,” Thomas Klein, who heads Mercedes’ van business, said in an interview, citing features including an ultraviolet disinfection system that’s popular in Asia. “We took their interests into particular consideration when we started developing the vehicle.” Luxury-first strategy loses momentum The launch highlights the pressure on Chief Executive Officer Ola Källenius to reinvigorate a luxury-first strategy that has lost momentum amid weaker-than-expected EV sales and intensifying competition in China. By casting the VLE as a grand limousine alongside the S-Class, Mercedes seeks to retain high-spending customers who might otherwise go for rival products at lower prices. The Mercedes van business has done well in recent years and posted a 10.2% adjusted operating margin in 2025, compared to just 5% for cars. The broader backdrop adds complexity. Renewed geopolitical tensions following the Iran conflict have stirred volatility in energy markets, threatening consumer confidence just as automakers seek to protect pricing. For Mercedes — which depends on buyers willing to spend more than €100,000 ($116,000) on a vehicle — prolonged market turbulence would raise the stakes. Multi-purpose vehicles, once defined by practicality, are being repositioned as luxury products, particularly in China, where chauffeur-oriented models have surged in popularity. Mercedes is betting that the VLE, with a targeted battery range of around 700km (435 miles), can capture share in a growing segment. BYD Denza D9, Hongqi HQ9 and Li Auto Mega: The Chinese luxury MPVs Mercedes must beat Competition is intense. BYD’s Denza D9, FAW Group’s Hongqi HQ9 and Li Auto’s Mega feature lounge-style interiors, massage chairs and expansive entertainment systems — often at lower prices. They tend to be tightly integrated into domestic digital ecosystems, with voice-controlled interfaces and seamless smartphone connectivity that resonate strongly with local buyers. The challenge extends beyond a single model. Since unveiling his strategic pivot in 2022, Källenius has prioritized higher-margin vehicles and pared back entry-level offerings, pledging to sustain carmaking returns of at least 8% even in tougher markets. Still, profitability has retreated as price competition in China intensified and early flagship EVs such as the EQS sedan struggled to gain traction. By William Wilkes

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Mercedes unveils luxury van to win over wealthy Chinese buyers