The activities of the German car manufacturer Mercedes-Benz have weakened recently: the company has now announced austerity measures. However, a spokeswoman left it unclear for the time being how exactly the costs would be reduced.
It was said that savings are already being made on fixed costs. “We will continue on this path calmly but extremely consistently.” The automaker did not answer whether any jobs would be cut. However, job security is not in question. This applies to the majority of employees in Germany and excludes layoffs for operational reasons until the end of 2029.
According to reports in the German media, top management vowed on Wednesday for stricter austerity measures. However, no concrete measures have been mentioned, it is said. The aim is to save several billion euros annually in the coming years.
The car manufacturer justifies the tense situation in the industry. At the end of October, Mercedes reported a profit decline for the third quarter: group profit fell by more than half to 1.72 billion euros compared to the previous year. Turnover fell by 6.7 percent to 34.5 billion euros. These financial results did not match Mercedes’ requirements, CFO Harald Wilhelm said at the time.
Difficulties in China
The company is currently having problems, especially in China. The expensive models with the star do not work as well as expected. But they are the core element of the CEO’s strategy, which has delivered record returns in recent years. The economic downturn in China has made wealthy customers unexpectedly frugal. Moreover, competition from domestic automakers is growing in the country.
VW and Ford, among others, also have problems.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
