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.
Azerbaijan and Iran have reached a key agreement on the operation mode and water allocation of the Araz reservoir, following the 54th meeting of the Permanent Joint Commission on the shared use of the Araz River's water and energy resources, held in Baku.
Azerbaijan has emerged as a critical transportation hub in China's Belt and Road Initiative, transforming from a regional energy exporter into a vital link connecting Chinese goods with European markets.
The election of nationalist Karol Nawrocki as Poland’s new president marks a significant political shift that could complicate the country’s relations with both the European Union and Ukraine,
Heavy flooding has wreaked havoc in southwestern China’s Yunnan province, destroying dozens of homes and vital infrastructure in the Nujiang Lisu Autonomous Prefecture, local authorities reported on Monday.
UN Headquarters in New York, powerful voices from France’s overseas territories accused Paris of sustaining colonial control under new names, demanding sovereignty, reparations, and justice for people of African descent.
On May 28, the inauguration ceremony of Lachin International Airport was held.
A car drove into crowds of Liverpool fans celebrating the club’s Premier League title in the city centre on Monday evening, injuring dozens including 4 children. A 53-year-old man believed to be the driver was arrested at the scene.
Taxi drivers across France are protesting government plans to cut payments for driving patients to medical appointments. These cuts are part of a broader effort by Prime Minister François Bayrou to save €40 billion in the 2026 budget and reduce the country’s large deficit.
EU ministers have greenlit a massive €150 billion defense investment fund—dubbed the Security Action for Europe (SAFE)—as the bloc ramps up its military readiness in response to Russia’s aggression and growing uncertainty over U.S. security guarantees.
Brazil’s economy is expected to have regained momentum in the first quarter of 2025, driven by a surge in household spending and private investment, according to a Reuters poll of economists conducted from May 21–26.
Azerbaijan’s state oil company SOCAR and Canada’s Gran Tierra Energy Inc. have signed a memorandum of understanding (MoU) to conduct joint research focused on the technical and economic assessment of a project to explore, develop, and produce hydrocarbon resources in the Guba-Caspian region.
The Food and Agriculture Organization of the United Nations (FAO) has warned that, without immediate and sustained support, thousands of rural households in Ukraine may be unable to plant or harvest on schedule—threatening both national food security and rural livelihoods.
Tesla’s new car registrations in Norway jumped by 213% year-on-year in May, reaching 2,600 vehicles, boosted by strong demand for the revamped Model Y SUV.
Switzerland’s economy outperformed expectations in Q1 2025, driven by a surge in exports to the United States and strong growth in the chemical and pharmaceutical sectors.
Russian stocks and the ruble fell as investors reacted cautiously to upcoming negotiations between Russia and Ukraine in Istanbul.
Azerbaijan and Iran have reached a key agreement on the operation mode and water allocation of the Araz reservoir, following the 54th meeting of the Permanent Joint Commission on the shared use of the Araz River's water and energy resources, held in Baku.
Azerbaijan has emerged as a critical transportation hub in China's Belt and Road Initiative, transforming from a regional energy exporter into a vital link connecting Chinese goods with European markets.
The election of nationalist Karol Nawrocki as Poland’s new president marks a significant political shift that could complicate the country’s relations with both the European Union and Ukraine,
Heavy flooding has wreaked havoc in southwestern China’s Yunnan province, destroying dozens of homes and vital infrastructure in the Nujiang Lisu Autonomous Prefecture, local authorities reported on Monday.
UN Headquarters in New York, powerful voices from France’s overseas territories accused Paris of sustaining colonial control under new names, demanding sovereignty, reparations, and justice for people of African descent.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment