Mercedes Intends To Sell Fewer Vehicles And Grant Managers Fewer Privileges.

Mercedes needs to save more than five billion euros by 2027 and has already started implementing a package of measures that is very different from, say Volkswagen. There will be no factory closures or layoffs, so the effort is concentrated on other areas. Precisely the ones that the Wolfsburg company protects.

It is clear that each car brand has its internal structure and philosophy and faces crises in different ways. Mercedes has not escaped the severe crisis affecting German brands, partly caused by electric cars, the invasion of Chinese brands, and stricter environmental standards.

But while Audi has already confirmed that it will close its Brussels factory and Volkswagen has reached an agreement with its employees, Mercedes has also introduced a package of measures at its headquarters that should help reduce costs by 2.5 billion euros by the end of 2025 and another 2.5 billion by 2027, starting January 1.

Savings start with management

Mercedes’ austerity plan differs greatly from that of Volkswagen, whose board members will not see their salaries cut by millions. The brand with the three-pointed star has made it clear that it will not close factories. According to a major German newspaper, a four-figure number of senior managers, ranging from team leaders to the highest levels, will be deprived of a pay rise in 2025 and will have to go to work at the brand’s different headquarters.

Remote work, one of the great privileges so far, is coming to an end, so managers will abandon the work from home that was imposed during the COVID-19 pandemic and which has continued until now without reason, although it will only be allowed in exceptional cases, such as sick children who need care. The brand understands that it is necessary to reduce all costs and that it must start from the top.

Fewer cars sold—less pay

Mercedes is already making savings on variable costs, such as the cost of producing cars and cutting production shifts, for example on assembly lines.

The ambitious savings plan is not only affecting Germany but the whole world. The Stuttgart-based company is reassessing its positioning, aware that it must become even more efficient and that everyone in the company must contribute to this. Fewer cars sold also means lower salaries for managers.

The global giant has not closed its annual accounts, but they indicate more than poor results. The results for the third quarter are not encouraging at all, as net profit fell by almost 54 percent compared to the same quarter in 2023. Mercedes’ most luxurious models, from the E-Class onwards, are the most profitable, and their sales fell by 12 percent, exceeding 30 percent in the case of electric models, mainly due to the setback in China.

• Also See: Mercedes Boss Blames Workers On Sick Leave For Current Crises