Mercedes has experienced a significant drop in earnings per car. That is why the Germans are now announcing cuts worth billions of kroner.
Mercedes announces a comprehensive savings plan that will cut billions of kroner from the company's expenses.
The decision comes after a disappointing third quarter, where profits in the passenger car segment fell drastically and margins fell to below five percent.
In order to meet the economic challenges, Mercedes has announced a number of measures to make the company more efficient and reduce costs.
CFO Harald Wilhelm has previously hinted at the need for changes, and now the plan is ready. Among other things, it involves a revision of wage costs, even though 91,000 of Mercedes' employees in Germany are protected by job guarantees.
That's what Automotive News writes.
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The savings plan builds on the company's existing cost efficiency plans, which were initiated in 2019.
These plans focus on improving the standardization of car design and procurement. In addition, Mercedes is considering changes to the production facilities, but the details are still unclear.
The drop in the profit margin from around 15 percent in 2021 to the current less than five percent in the third quarter of 2024 has caused concern at Mercedes.
However, the German car brand hopes that future products can help turn the tide. Among other things, the new CLA model to be launched next year is expected to make a positive impact with its long range, advanced operating system and automated traffic functions. However, Mercedes sources the engine from Volvo in China. Read more about it here .
In addition to the CLA, Mercedes plans to launch a number of new models, including electric versions of the C-Class and GLC, an electric AMG and updated versions of the S-Class and GLE. In addition, the company will continue to produce models with internal combustion engines for longer than previously announced.
