German auto-giant Daimler to stop building Mercedes-Benz sedans in U.S. and Mexico after second-quarter loss due to Covid-19 pandemic.
It said it will stop making the C-Class in Tuscaloosa, Alabama, and Mercedes-Benz A-Class in Aguascalientes, Mexico.
German auto-giant Daimler will stop building sedans in the U.S and Mexico as it seeks to cut cost after posting less than expected second-quarter loss.
The automaker had earlier announced it would cut 15,000 of its worldwide 300,000 jobs because profits were low in 2019.
The auto-giant said it will stop making Mercedes-Benz C-Class sedan in Tuscaloosa, Alabama. This plant will continue to produce fastselling Sport Utility Vehicles (SUVs).
It will also stop producing the Mercedes-Benz A-Class in Aguascalientes, Mexico. This plant will now focus on the GLB SUV model.
This move to cut cost comes after announcing a second-quarter operating loss of $1.91 billion last week ahead of the scheduled release date of July 23.
No details was given about when production of the A-Class and C-Class will cease in both Mexico and U.S.
Daimler was hurt by a slump in demand amid dealership closures and lockdowns due to the coronavirus pandemic.
Mercedes-Benz Cars & Vans unit posted an operating loss of $1.27 billion and an adjusted operating loss of $323 million.
The automaker said it recorded a drop in global sales of almost 19 percent (870,000 cars) in the first half of 2020.
Daimler also incurred $782 million in restricting costs to retool its global production network of factories producing Mercedes-Benz passenger cars.
Despite the impact of COVID-19 pandemic on the auto industry, Daimler Mercedes recorded the “Best Second Quarter” in its biggest market “China”.