Mercedes-Benz has said it will drop some of its cheaper models and focus on the more profitable luxury end of the market.
The German carmaker will recast itself as "a dedicated pure-play luxury car company", it said, in an attempt to take on rivals such as Ferrari.
Car manufacturers including Mercedes have enjoyed a period of high profits as wealthy people sitting on cash piles after two years of lockdowns look for ways to spend their money.
A shortage of parts, most notably computer chips, has prompted carmakers to charge more for their vehicles, improving margins. Last month Mercedes said revenues for the first three months of the year jumped 8 per cent despite selling 52,000 fewer cars as a result of higher prices, and after more of its top-end models rolled off the production line.
![Mercedes says revenues for the first three months of the year jumped 8 per cent. Photo / New Zealand Herald](https://www.nzherald.co.nz/resizer/v2/XGCJF7NGKNDY5FAKCNG3BD5QAU.jpg?auth=08c779c85e90ff1844027ef7f4014edfb63ac3232ea2b9bcbcd506c3af227e46&width=16&height=11&quality=70&smart=true)