Almost three years ago, Mercedes boss Ola Källenius presented his luxury strategy on the Mediterranean under the motto “Economics of Desire”. Expensive cars with noble equipment – and preferably only electrically. In addition, an ambitious goal of returns between twelve and 14 percent. Even though the world has changed in many ways since the days in May 2022, Källenius is sticking to its strategic direction. Commonively with technology chief Markus Schäfer and CFO Harald Wilhelm, the car manufacturer’s CEO of the car manufacturer at an investor day on the occasion of the annual balance sheet press conference on Thursday in Sindelfingen Again and again the model offensive of the coming years emphasized that Mercedes is supposed to bring Where it belongs in the opinion of Sweden: Too stable double-digit returns through the development of the “most coveted cars”, but when updating the strategy was the fact that the top managers of the traditional Baden-Württemberg group was the word “luxury” Long no longer needed as often as it was in the recent past, not the only change. Mercedes reacts to the market situation with a comprehensive savings program, which is now supplemented by a tightening of the global production structures. In addition to the “Next Level Performance” package presented at the end of 2024, with which the company wants to save five billion euros by 2027, Mercedes takes measures to push the costs in global production by ten percent within the same period. reacts to the bad business in the past year, the results of which are far away from the ambitions that Källenius on the Mediterranean presented the investors. In 2024, the sales of the car division fell by 4.4 percent to EUR 107.761 billion, the adjusted operational profit (EBIT) fell by around 40 percent to 8.677 billion euros, which corresponds to a return return of 8.1 percent. In the previous year it was 12.6 percent. Mercedes reduces the global production capacity of currently 2.5 million cars to two to 2.2 million in 2027. Before that, the company was already from the Hambach (France) works, Iracemápolis ( Brazil) and the assembly plants in Russia and Indonesia got out and had sold the van in Argentina. The production of the Mercedes GLB in the community work with Nissan ends at the end of 2026 whether the company will continue to hold the shares in the work. “We will not close a work in Germany” “We will not close any work in Germany, but we will capacity Limit to 300,000 cars, ”explains CFO Wilhelm with a view to the works in Sindelfingen, Rastatt and Bremen. “We will adjust the number of employees by ending temporary agency work and using the fluctuation.” Wilhelm and Källenius did not give a number, as many areas are affected by the conversion. Overall, the production share in countries with lower costs is doubled from 15 to 30 percent in the coming years. Among other things, Mercedes will increase the production capacity to 200,000 cars in the Hungarian Kecskemét. There, the costs are around 70 percent cheaper. Mercedes also plans to relocate a compact model to Hungary. Källenius and Wilhelm had informed the management at the end of last year about the “Next Level Performance” program, it includes all areas of the company. “We will slim down personnel structures, reduce the levels of the administration and change team positions,” explained Wilhelm. To this end, Mercedes plans to press the costs of material by being integrated into the planning earlier and more on standards. The fixed costs, which the company has reduced by 19 percent since 2019, should be ten percent lower in this way by 2027. With the C-Class as a combustion engineer and electrical version, the turn should bring the turn according to the plans of Källenius. However, it will still take time for the new models and the savings efforts and stabilize returns. For 2025, Mercedes again expects a car production of less than two million vehicles. In 2024, the company sold 1,983,000 cars. More on the topic of the operational sales return of the car division, Källenius and Wilhelm are therefore planning to drop and assume only six to eight percent for the current financial year. The profit is likely to be significantly below the result of 2024. And the dry spell could continue: Also in 2026 the sales remain below two million according to the estimates of Mercedes, only in 2027 that could change. Over the entire group with the van division and the Mercedes-Benz Mobility division, the company redeemed 145.6 Billions of euros, that is a minus of 4.5 percent. The operational profit (EBIT) fell by more than 30 percent to 13.6 billion euros. The Free Cashflow in the industrial business was 9.1 billion euros after 11.3 billion euros a year earlier.
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