Mobile-Menu

Cost Cutting Mercedes-Benz aims to save several billion euros

Source: dpa | Übersetzt von KI 2 min Reading Time

The Stuttgart premium manufacturer is also tightening its austerity measures. Whether the staff will be affected remains open at present. However, job security is in place.

The car manufacturer Mercedes needs to save money; things are not going as well worldwide as hoped.(Image: Grimm – VCG)
The car manufacturer Mercedes needs to save money; things are not going as well worldwide as hoped.
(Image: Grimm – VCG)

The business of car manufacturer Mercedes-Benz has recently weakened, and now the company has provided more details on its savings plan. "In the coming years, we will reduce our costs by several billion euros annually," a spokesperson stated upon request. She did not specify exactly how the costs would be saved. The company also initially left unanswered questions about possible job cuts.

The savings plan was justified by the tense situation in the automotive industry: "The economic situation remains extremely volatile worldwide. Only through a sustainable increase in efficiency can we remain financially strong and capable of action." Significant savings, including on fixed costs, have placed the company in a good starting position. "We are continuing this path calmly but very consistently," it was stated.

Job security remains unaffected

"Stuttgarter Zeitung" and "Stuttgarter Nachrichten" had previously reported that the company's top management had sworn in higher management on the tightened austerity measures during a conference call.

Specific measures or resolutions were not mentioned on Wednesday (20.11.), according to the report. However, the job security that applies to the majority of employees in Germany is not in question, Mercedes emphasized to the newspapers. This agreement, internally called "Zusi 2030," generally excludes termination due to operational reasons until the end of 2029.

Profit slump due to China weakness

Mercedes had reported a profit slump at the end of October for the third quarter: The group’s earnings fell by more than half year-on-year to 1.7 billion euros. Revenue decreased by 6.7 percent to just under 35 billion euros. These financial results did not meet the expectations held by Mercedes, CFO Harald Wilhelm stated at the time. On this occasion, the manager also announced a greater focus on costs and efficiency. We will leave no stone unturned.

Mercedes is currently experiencing difficulties, especially in China. The expensive models with the star are not performing as well as expected there. No improvement is in sight for the current year either.

However, the expensive cars are a core element of the strategy of CEO Ola Källenius. They have brought record profits to the company in recent years. With the economic downturn in China, the wealthy Mercedes customers have unexpectedly become frugal. In addition, the competition from domestic car manufacturers is growing in the country that has been a growth guarantor for German manufacturers for many years.

Subscribe to the newsletter now

Don't Miss out on Our Best Content

By clicking on „Subscribe to Newsletter“ I agree to the processing and use of my data according to the consent form (please expand for details) and accept the Terms of Use. For more information, please see our Privacy Policy. The consent declaration relates, among other things, to the sending of editorial newsletters by email and to data matching for marketing purposes with selected advertising partners (e.g., LinkedIn, Google, Meta)

Unfold for details of your consent

Related content