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Disappointing Sales Result Forces Mercedes-Benz To Cut Costs
Mercedes-Benz is to do more to rein in costs. The German carmaker suffers from fierce competition in China and persistently weak demand for luxury cars and electric vehicles.
“The results of the third quarter do not meet our expectations,” says CFO Harald Wilhelm. The car company’s turnover fell by about 7 percent in the third quarter compared to last year’s period. Net profit fell by almost 54 percent to 1.7 billion euros. Mercedes-Benz had already lowered its profit expectations for the entire year.
“We are cautious in our outlook for market development and will increase all efforts to increase efficiency and save costs in all business areas,” Wilhelm said in an explanation of the figures.
Although Mercedes promises to improve its cost position, the company did not provide details about where exactly the cuts are being made. The manufacturer has several factories in Germany, where labour and energy costs are relatively high. In addition, ‘Das Haus’ is investing heavily in research and development for the transition to electric driving, while Mercedes continues to produce both electric models and vehicles with a combustion engine.
Other German carmakers are also suffering from the malaise in the automotive sector. BMW, for example, is also struggling with a sharp drop in sales in China and recently lowered its profit expectations. Volkswagen is struggling with overcapacity and difficult market conditions and announced that it could close factories in its own country for the first time in its history.
