- Mercedes looks to save several billion euros per year.
- The automaker is shifting its strategy amid the significant decline in its third-quarter earnings.
The Mercedes-Benz Group has reportedly announced that it would implement more stringent cost-cutting measures. EuroNews, citing several articles from German publications like Handelsblatt and Stuttgarter Nachrichten, said that the three-pointed star marque aims to save as much as “several billion euros” per year.
The company, however, didn’t officially specify its plans on how to implement its new target. It also didn’t discuss the potential job losses arising from its new strategy.
However, the source noted that the company’s German employees will unlikely be impacted immediately by Mercedes’ move. This is due to the automaker’s “Zusi 2030” policy, which protects them from mandatory redundancies until the end of 2029. The agreement also safeguards their tenure from the automation brought about by the increasing use of robotics and artificial intelligence (AI) in the production and other operations of the luxury car brand in its home court.
The report added that Mercedes senior officials supported the implementation of the austerity measures in a conference call.
Mercedes’ Decreasing Revenue
Mercedes’ new decision came right after it released its third quarter (Q3) earnings report in October. The automaker posted a revenue of $34.5 billion within that period. However, it came 6.7% short compared to its earnings last year. Meanwhile, net profit slumped by 54% between the two periods at $1.72 billion.
The company attributed the declining numbers to the increasingly competitive and uncertain landscape within the automotive industry. It also explained that it is currently investing toward boosting its “sustainable efficiency,” which could translate to more growth in the company going forward.
Mercedes assured that it “continues to generate solid cash flows” despite the challenging times.