Yahoo Autos The S-Class Is Losing Its Spot as Mercedes-Benz's True Luxury Flagship
Between its SpongeBob SquarePants shape and impregnable vibe, the Mercedes G-Class has often been described as a vault. A Germanic fortress. These days, Mercedes might consider adding a safecracker's dial to the G-Wagen's thick steel doors to guard the windfall profits piling up inside.
Make no mistake: From sales and transaction prices to cultural clout, the once-humble Geländewagen has clambered over a slipping S-Class sedan to become Mercedes's de facto flagship and halo model in America. By even conservative estimates, the G-Class is generating more than $200 million a year in profit for Mercedes in America alone. Not bad for a model born as a bare-bones agricultural truck and military off-roader, still built in Austria by co-creator Magna Steyr.
"When it was launched in 1979, the G-Class's combination of outstanding talent off the beaten path and capabilities on urban streets was an absolute novelty," Michael Schiebe, chief executive of Mercedes-AMG, told Road & Track.
It's a novelty no more. Over five decades, this utilitarian pumpkin steadily transformed into a sumptuous coach, coveted by stars like Drake (in $1-million-plus Maybach Landaulet form) and flaunted on social media. In a fairy-tale reversal, the G-Wagen is outselling the S-Class in America for the first time, including 5,477 sales through June, versus 4,785 for the S-Class.
The G-Wagen has more than tripled its American sales over the past decade, including a stunning 43 percent rise last year from 7,020 units to 10,023, topping the 10K mark for the first time in history.
In America's wealthiest enclaves and social playgrounds, you can't throw a golf ball or spill a martini without hitting a G-Wagen. They're freaking everywhere, stiffly pressed and sparkling clean, doing everything but what they were initially designed for. As capable as it truly is, in its most common usage, it's a safari-clad, cosplaying SUV on the hunt for elusive hors d'oeuvres, its adventures documented by Instagram, not David Attenborough.
The G-Class now transacts for an average of $193,000 in showrooms, yet sales continue to rise. That compares with just $131,000 for the typical S-Class, according to automotive consultancy firm Strategic Vision. However you slice it, the G-Wagen has become a three-ton cash cow for Mercedes.
"This is where the luxury market has been headed since 1995, and it really accelerated at the turn of the millennium," says Alexander Edwards, president of research firm Strategic Vision. "The shape and size reinforce security and trust, with the perception of strength and the Mercedes brand name.
"It becomes a cash cow [because of] customers who don't even blink at the prices, throwing money at Mercedes for a vehicle that clearly distinguishes themselves from others, with more tech and innovation than most SUVs out there," he says.
Edwards added a wry cha-ching: "Plus, dealers can throw a lot more options on a luxury SUV than a sedan."
In aspirational halo-car terms, it's no contest. When a Wall Street banker or Brussels bureaucrat buys an S-Class, no one blinks. When gymnastics GOAT Simone Biles trades a black G-Wagen for a new snow-white version, it makes headlines. Mercedes tried to position the electric EQS sedan as a flagship and halo car almost by default, as if it were being handed the S-Class's traditional mantle. But Benz's nepo baby has fallen flat with consumers.
A Peek Inside the Vault
Mercedes remains coy about busting open this 4x4 vault and showing nosy media Geraldos exactly what's inside. Schiebe—whom I first spoke with during a drive of the 2025 Mercedes-AMG G 63 and electric G 580 on a muddy off-road course at a vineyard in southern France—reminds us that Mercedes "does not disclose specific details about the profitability of individual models."
Roughing in numbers is easy enough though. Again, the G-Class found just over 10,000 customers last year, versus nearly 58,000 for the GLE-Class, Mercedes's best-selling model. That may not sound like a lot of SUVs. But in a top-heavy lineup, dominated by an AMG G 63 that starts above $184,000, modest volumes generate outsized returns.
Combining Mercedes's reported 12.6 percent return-on-sales in 2023 as a corporate profit baseline—itself down from 14.6 percent in 2022—with an ultra-conservative $175,000 transaction price, each new Geländewagen would haul home about $22,000 in profit. (Again, Edwards pegs actual transaction prices at $193,000). Multiply that $22,000 by last year's sales, and you're looking at a $220-million-plus U.S. profit in 2023.
Even that assumes every G-Class is an "average" Mercedes model in terms of that 12.6 percent profit, a corporate average that includes everything from A-Classes to commercial vans.
All evidence—including Magna Steyr's Austrian production, with a single full redesign over 44 years, and long factory amortization for this body-on-frame truck—suggests a far more lucrative franchise. While Mercedes declines to cite the model mix, dealers affirm the AMG version delivers a solid majority of sales: Many shoppers notoriously choose the G that costs the most. May we assume an options-stuffed AMG G 63 generates more profit on a percentage basis than a Smart car? Mercedes, understandably, won't say, whether the Kardashians care or not.
Hello, Angel
Aside from "iconic," perhaps, no term in the auto industry is overused as much as "halo car." Edwards says many purported halo cars do little or nothing to move the needle for brands. But the G-Class is the real deal, he says, with an aspirational design that commands attention and brings people to showrooms—including people who end up choosing a more affordable Mercedes.
"The wealthy will buy it, and others will say, 'What else does Mercedes have to offer?' And it's brilliant of Mercedes to not shy away from the G-Class, as GM shied away from Hummer, but instead to embrace it."
Wealthy, they are. Strategic Vision's annual owner surveys show luxury car buyers average $182,000 in household income. That rises to a heady $425,000 for the S-Class. But G-Class buyers report an average $826,000 household income—42 percent of them say they earn above $1 million a year, versus 24 percent for the S-Class. They're the kind of buyers brands kill for.
"The household average may be even higher, since we don't track income over $1 million," Edwards says.
On its face, the addition of an electric G 580 for 2025, seemingly tailor-made for socially conscious soirées and red carpets from Hollywood to New York, should attract more high rollers. But Edwards isn't convinced. In his surveys, about 60 percent of G-Class buyers describe themselves as Republicans or conservative with no party affiliation. Only 14 percent say they are Democrats, and only three percent identify as liberal or progressive. Between the politicization of EVs and their sales growth stalling, Edwards says Mercedes has its work cut out to convince people they should choose a plug over the pump.
"If they don't communicate those advantages well, I don't expect the electric G-Class to do very much," Edwards says.
The World Is the SUV's Oyster
In some ways, the market fell into the G-Wagen's rectilinear lap. Off-road SUVs with authentic heritage are more popular than at any time in history, including the Jeep Wrangler and reborn Ford Bronco. It's why a covetous Volkswagen wants its share and is reviving a dormant Scout brand, minus its own farming roots in International Harvester.
Whether you're talking about BMW, Audi, Jaguar, Cadillac, or Lincoln, full-size luxury sedans—the industry’s unchallenged flagships for more than a century—have all bowed before SUVs. As the perennial market leader, the S-Class used to sell 25,000 copies a year in its sleep and above 30,000 in its best years. A mass exodus from sedans saw that dip to about 12,400 for 2023, a dismaying 22 percent drop in just one year. In a sign of the times, Mercedes just cut S-Class production to a single shift at its Sindelfingen plant. (Globally, the S-Class still outsells the G-Class, including about 93,000 copies last year versus about 43,000 for the SUV).
Alex Levin is the founder of Expedition Motor Company, which restores former military and police Geländewagens into collector-grade machines, largely built in Poland. They include a charming 1993 250GD Wolf convertible I recently drove in Maine. EMC represents the purist end of the G-Class spectrum. The more, er, extroverted end finds the likes of Germany's Brabus and Mansory separating folks from their nouveau riches. Old to new, the nostalgic restoration and tuner industry further highlights the G-Wagen's enduring status.
Plugging along a Maine road in the 250GD, its 91-hp, five-cylinder diesel chugging to 60 mph in 20-some seconds, it's impossible to not marvel at how far the G-Class has come, without straying entirely from its roots.
"It's always been this overengineered monster with great curb appeal," Levin says.
Focused on his time-capsule builds, Levin doesn't blame the modern franchise or waste much thought on whether it's "a posh revenue generator." He's not surprised that this square-jawed, countrified German truck grew up to be a city favorite and nightlife star. Nor does he scoff at folks who buy a six-figure off-roader and never figure out what those dashboard locker switches actually do.
"If I can get an iconic design, with more space than a sedan, and all the same luxury features and safety, why wouldn't I?" Levin asks. "You have this 4x4 that someday might take you off the beaten track. Maybe, just maybe, people will use it for the purpose it was originally built for, and that's cool."
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