Mercedes-Benz Like Volkswagen May Be Forced To Shut Down Two Factories

Mercedes-Benz may close German plants due to declining competitiveness, mirroring similar struggles at Volkswagen and highlighting broader challenges in Germany’s manufacturing sector.

The German automaker has warned it may close one assembly and one powertrain plant in Germany if it fails to reach cost-reduction agreements with the IG Metall union. While production chief Michael Schiebe stated the goal remains to keep all sites open, he cited declining competitiveness and rising pressure from Chinese rivals as key challenges. The IG Metall union has rejected these threats, promising determined resistance against any attempts to pressure employees through potential plant closures.

Although Mercedes-Benz has not disclosed which specific assembly and powertrain facilities in Germany are currently at risk, the company maintains a footprint of seven powertrain plants and three vehicle assembly sites across the nation.

This development reflects broader systemic challenges within the German automotive sector, paralleling the difficulties currently faced by the Volkswagen Group, which is reportedly evaluating the closure of four domestic plants between 2031 and 2034.

Rising competition from Chinese automakers like BYD and Geely has severely undercut Mercedes-Benz, contributing to a 30% sales drop in China and an $800 million impairment in Q2. Additionally, heavy 2025 tariffs have burdened the company with $1.1 billion in costs.

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