Mercedes-Benz will restart its voluntary redundancy programme in Germany in December and is in talks with unions over further cost reductions, CEO Ola Kaellenius was quoted as saying by AFP on Wednesday, a day after the luxury carmaker warned of lower full-year profits.
"Germany accounts for roughly 15 percent of our sales, but two-thirds of our employees and structures are based here," Kaellenius said during a call to discuss the company’s third-quarter results.
Automaker Steps Up Cost-Cutting Efforts
German carmakers have faced intense competition and weakening demand in China, the world’s largest car market, prompting them to make significant adjustments to their domestic operations.
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Mercedes-Benz on Tuesday became the third major German carmaker, after Volkswagen and BMW, to issue a profit warning for the year, citing challenges in China.
BMW aims to cut 8,000 jobs by the end of 2027 through its own voluntary redundancy programme. Volkswagen Group, which owns brands including Porsche and Audi, plans to cut 120,000 jobs globally across its brands by the end of the decade.
Kaellenius said Mercedes-Benz could not provide further details while discussions with unions were continuing. He added that he remained focused on reducing costs.
Cost Differences Across Markets
Kaellenius said labour costs in China, Hungary, Romania and the US were all lower than in Germany. He added that "eastern Europe as a whole is open to any industrialist looking to expand".
Mercedes-Benz reported a nearly 30 per cent increase in third-quarter net profit to €1.52 billion ($1.69 billion), even as overall sales fell 4.5 per cent to €30.7 billion. The shrinking sales was largely attributed to a sharp fall in China.
Despite mounting pressure in the market, Kaellenius said Mercedes-Benz could not afford to withdraw from China, where more than 100 carmakers are competing amid an intense price war.
