Berlin, February 20, 2025 – Mercedes-Benz has launched a fresh cost-cutting initiative aimed at reviving sales and margins, as the German carmaker forecasts a significant drop in earnings in 2025.
The new plan comes on the heels of a 40% slump in the car division’s earnings in 2024, driven by weak sales in key Chinese and German markets and subdued demand in Europe.
Chief Executive Ola Kaellenius acknowledged that the company faces “an increasingly uncertain world,” prompting a reassessment of previous growth targets. While the firm had previously set an adjusted return on sales of up to 14% in favorable conditions - and no less than 8% during tougher times - current projections for the car division indicate a return of only 6-8% this year.
Mercedes-Benz’s cost-cutting measures include plans to reduce production costs by 10% by 2027. This new target builds on an ongoing initiative launched in 2020, which aimed for a 20% reduction in costs between 2019 and 2025-a goal that has already seen a 15-16% reduction. Further details are expected to be outlined later at the company’s upcoming earnings conference.
The company’s cautious outlook reflects broader challenges in Europe’s automotive sector, where manufacturers contend with tightening carbon emissions regulations, rising trade tensions with the United States, and intensified competition from Chinese electric vehicle startups. While competitors such as Volkswagen and various suppliers have announced deep cost cuts, some rivals like Renault have reported record operating profits in 2024, bolstered by lower costs and new product launches.
Mercedes-Benz also projected that unit sales will fall below the 1.98 million vehicles sold in 2024 - a figure that may disappoint investors and labor representatives who had aimed for a minimum target of 2 million units to fully utilize production capacity.
“To ensure the company's future competitiveness in an uncertain world, we are taking steps to make the company faster, leaner, and stronger,” Kaellenius said in a statement.
In addition to the cost-cutting measures, the company’s board will propose a reduced dividend of 4.30 euros per share, down from 5.30 euros in 2023.
As the automotive industry navigates a period of volatility, Mercedes-Benz’s strategy underscores the balancing act between cost management and maintaining market share amid shifting global economic conditions.
U.S. and Iranian officials said they had agreed on a framework to end their war, halt the U.S. blockade of Iran and reopen the Strait of Hormuz, a pre...
Türkiye and Saudi Arabia are aiming to establish a railway connection linking the two countries through Syria and Jordan within the next three to fou...
As football supporters around the world follow the 2026 FIFA World Cup, a group of young women in Gaza are fighting a very different battle - rebuildi...
Ukrainian President Volodymyr Zelenskyy said he spoke with U.S. President Donald Trump on Sunday, 14 June about efforts to end Russia's war in Ukrai...
At least six Palestinians were killed in Israeli strikes and gunfire across the Gaza Strip on Sunday, 14 June, according to local health officials, as...
China's domestic automakers have a message for the boardrooms of premium German brands such as Porsche, Mercedes-Benz, and BMW: We are coming for your customers, and we are armed with superior technology at a fraction of the cost.
George Russell claimed victory at the Canadian Grand Prix, securing Mercedes’ first win of the season in the 10th round of the Formula 1 World Championship.
Mercedes-Benz(MBGn.DE), opens new tab plans to begin producing a new vehicle at its Tuscaloosa, Alabama, plant in 2027, the company said Thursday, the latest in a series of investments carmakers have announced following U.S. President Donald Trump's aggressive auto tariffs.
Pakistan has warned that any attempt by India to block or significantly reduce river flows under the Indus Waters Treaty could have “far-reaching consequences”, after India's water minister said New Delhi was working to ensure that “not a single drop” of water reaches Pakistan in the coming years.
Armenia has every right to choose Europe. But Europe’s support for Armenia’s direction should not become automatic approval of its political process.
Details of a reported draft memorandum of understanding between the United States and Iran offer the clearest picture yet of how both sides plan to end months of conflict and move towards a longer-term settlement.
The U.S. and Iran say they have reached a deal to end their conflict, with an immediate ceasefire and reopening of the Strait of Hormuz after the lifting of the U.S. naval blockade. Talks will continue over the next 60 days to finalise the agreement
U.S. President Donald Trump has said a peace agreement with Iran is scheduled to be signed on Sunday in a post on social media, despite Tehran's Foreign Ministry spokesperson Esmaeil Baghaei saying no deal would be approved this weekend.
At the start of 2026, something unusual happened in China's car market. BYD, the company that had spent years at the top of the domestic sales charts, was knocked off its perch by a rival.
Apple has unveiled a long-awaited upgrade to Siri, aiming to close the gap with technology rivals and emerging artificial intelligence firms in an increasingly competitive market.
ChatGPT maker OpenAI has confidentially filed for a U.S. initial public offering (IPO), the company said on Monday, joining rival Anthropic in a race to the stock market as investors seek exposure to the artificial intelligence boom.
Chinese carmakers are rapidly reshaping the global automotive market, with record exports, soaring electric vehicle sales and growing investments overseas putting pressure on established European, Japanese and U.S. rivals.
The International Labour Organization (ILO) has begun its latest round of negotiations on creating the first binding global standards for platform-based work, covering services such as ride-hailing, food delivery and other app-based work.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment