Mercedes-Benz recently announced its revised cost-cutting roadmap. This came amid fears of its looming drop in earnings for this year due to stiffening competition.
On Thursday, the German luxury automaker reported a “solid cash generation” with a €9.2 billion free cash flow coming from its industrial business in the 2024 fiscal year. However, its car division took a 40.5% slide in earnings during the period, with a slump from €14.224 billion in 2023 to €8.460 billion in 2024.
As of 2024, Mercedes sold around 1.983 million units of its cars. However, it warned about the possibility of a slight decline in the unit sales of its cars division in 2025. Thus, earnings would also likely be below current levels. What’s more, the automaker is proposing a cut in its dividends for investors from €5.30 per share in 2023 to €4.30 following its 2025 Annual General Meeting in May.
“Mercedes-Benz Group delivered solid results in a very challenging environment thanks to a range of outstanding products and strict cost discipline,” said Ola Kaellenius, CEO of Mercedes-Benz Group AG. “To ensure the company’s future competitiveness in an increasingly uncertain world, we are taking steps to make the company leaner, faster, and stronger, while readying an intense product launch campaign for multiple new vehicles starting with the all-new CLA.”
Despite the bleak outlook, Mercedes vowed to continue its push toward advancing the development and marketing of its BEV (battery electric vehicle) and electrified high-tech ICE (internal combustion engine) models without compromising their luxurious and other standout features.
According to Euronews, Mercedes will likely continue to bear the brunt of the challenging times brought about by the incoming election in Germany, the generally lackluster auto market, and declining demand for its luxury cars.
