German automaker Mercedes-Benz has announced a plan to cut billions of euros in costs in response to the deteriorating business environment, according to a report by dpa-AFX on MarketScreener.
A company representative said: “Over the coming years we will reduce our costs by several billion euros per year.”
However, specific cost-saving measures have not yet been announced and the potential impact on employment is currently unclear.
The announcement comes as the German automotive industry faces challenges, including the transition to electric vehicles and increased competition in the Chinese market.
Mercedes-Benz justified the cost-cutting measures by citing the volatile global economic situation.
“The economic situation remains extremely volatile worldwide. Only by sustainably increasing efficiency will we remain financially strong and able to trade,” the representative said.
Mercedes-Benz has emphasized the importance of maintaining financial strength through significant savings, including reductions in fixed costs.
“We will continue on this path calmly but extremely consistently,” the spokesperson added.
Reports from “Stuttgarter Zeitung” and “Stuttgarter Nachrichten” indicated that the company’s top management has communicated the cost-cutting strategy to upper management, although specific actions were not described in detail.
Despite the cost-cutting plans, Mercedes-Benz assured that job security remains intact for most employees in Germany.
The ‘Zusi 2030’ agreement excludes forced layoffs until the end of 2029.
At the end of October, Mercedes-Benz reported a profit decline for the third quarter, with group profit falling by more than 50% year-on-year to 1.72 billion euros.
Turnover fell by 6.7% to €34.5 billion.
CFO Harald Wilhelm noted at the time that these results did not meet the company’s expectations, highlighting the need for cost savings.
This announcement is in line with similar strategies by other automakers, such as Volkswagen, which is also considering cost cuts to increase competitiveness.
Volkswagen’s workers’ union has proposed $1.6 billion in cuts, conditional on avoiding factory closures in Germany.
The automaker plans to cut costs by more than $17 billion, including possible job cuts at six factories in Germany.
This week, US automotive giant Ford announced plans to cut its workforce in Europe by 4,000, with the majority in Germany (including 800 in Britain).
“Mercedes-Benz Plans Cost Cuts Amid Industry Challenges – Report” was originally created and published by Just Auto, a brand owned by GlobalData.
