What’s the Buzz: Auf Wiedersehen Mercedes-Benz S400h, farewell hybrid incentives?

Over the four years the Mercedes-Benz S400h was on sale in Malaysia, some 4,500 units were put on the road – a staggering amount for a flagship limousine. Suffice to say, this number will take some beating.

It’s not hard to fathom the ‘perfect storm’. Before the S400h qualified for tax exemptions as a locally assembled hybrid, the indicated retail price was ‘below RM900,000’. I hope nobody bought one then because after the exemptions kicked in, a comprehensively spec-ed Mercedes-Benz S400h could be had for less than RM600K. Mercedes-Benz Malaysia (MBM) literally couldn’t produce enough of them, such was the appetite for the symbol of prosperity and success.

Now that the replacement for the S400h has arrived – a petrol-powered S450L that costs RM699,888, about RM100K more than the S400h (take note that this is a GST-free price for the S450L), it’s clear that the tax exemption for locally assembled hybrids, as far as Mercedes-Benz Malaysia is concerned, has run its course as the E350e was also phased out recently, replaced by the E300. And even though the C350e plug-in hybrid is still being offered at Mercedes showrooms, its availability may not be for long.

Despite having to price the S-Class higher, Mark Raine, the VP for Sales and Marketing at Mercedes-Benz Malaysia remains upbeat about the prospects of the updated limousine, pointing out that the S450L with its 367hp/500Nm 3.0-litre twin-turbo V6 offers more performance (0-100km/h in 5.4 seconds, as opposed to 6.8 seconds) compared to the S400h with no sacrifices in luxurious appointments. In fact, there’s even a road tax savings now that the engine size is smaller.

Raine (left) and Dr. Claus Weidner, President & CEO of MBM unveiling the updated S-Class which is no longer a hybrid.

With hybrids only making up for around 12% of all Mercedes-Benz cars sold in Malaysia (when all three hybrid models were available at the showrooms), the business decision to discontinue hybrid models wouldn’t have been too heart-wrenching. And because nothing ever happens overnight in the car industry, one is safe to assume that this decision was made quite a while back, most likely brought on by the expected expiry (or non-renewal) of the hybrid incentive. Remember, customised incentives awarded by the government for the local assembly of hybrid vehicles are finite and limited by time.

When asked whether this is a setback for Mercedes-Benz’s EQ (for Electric Intelligence) initiative in Malaysia, Raine describes EQ as a long lead to the eventual introduction of more electrified models here. After all, Mercedes-Benz’s global portfolio will feature 50 electrified models by 2022, with no less than 10 of them fully electric. Raine also reaffirmed MBM’s commitment to local production and is looking forward to finding out what the new national automotive policy holds.

All this then begs the question: what will happen to the hybrid incentives? For brands such as BMW and Volvo whose sales volumes are significantly contributed by hybrid models (e.g. more than 50% of all BMW vehicles sold in Malaysia are plug-ins), you could say this is squeaky bum time (google that if you’re not a football fan) as the new government figures out the way forward for the automotive industry. As they say, this space is well worth watching.


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