Mercedes-Benz Group forecasted an earnings drop this year due to uncertain greater economic conditions, and it will aim for more direct sales in some large markets for maximized margins.

The German carmaker foresees a lower adjusted sales return of 12% to 14% in its cars division, plus group earnings under that of last year.

The luxury brand stalwart is taking into account diminished European demand, continued semiconductor shortage, inflation, high raw-material and energy prices, and China’s gradual pandemic recovery.

Mercedes said it expects its higher-end model sales to increase a small amount this year, continuing a trend of that share of business shoring it up against higher costs.

The brand plans to shift to direct sales in some European markets, including Britain and Germany, in order to save on costs and eliminate consumer concerns that they might find better prices at another dealer, Reuters reported.

Chief Executive Ola Kaellenius said, "You turn yourself from a wholesaler into a retailer. It changes your whole attitude in how you run the business."

LEARN MORE: Luxury German Brands Dip in 2022