Performance will hit directly| Mercedes-Benz puts the “big knife” of layoffs to its German base camp

Photo source: Visual China

Blue Whale News, February 20 (Reporter Li Zhuoling)Mercedes-Benz’s report card last year was announced.

On February 20, Mercedes-Benz Group (hereinafter referred to as Mercedes-Benz) released its 2024 results report. Data showed that the group’s profit before interest and tax (EBIT) reached 13.6 billion euros, down 31% year-on-year; revenue was 145.6 billion euros, a year-on-year decrease of 4%; a dividend of 4.30 euros per share is planned, compared with 5.30 euros in the same period last year.

Photo source: Screenshot of Mercedes-Benz financial report

In terms of business segments, both its passenger car business and light commercial vehicle business are under pressure. Among them, the adjusted EBIT of the passenger car business was 8.7 billion euros, which was 14.3 billion euros in 2023, a year-on-year decrease of nearly 40%.

It is reported that its adjusted sales profit margin (RoS) will be 8.1% in 2024 and 12.6% in 2023. However, its R & D costs remain at a high level, with R & D expenditures of 8.7 billion euros in 2024, mainly used for investment in future platforms and technologies, especially MB.OS, while investment in fixed assets (PP E) is at the same level in 2023.

The light commercial vehicle business adjusted EBIT was 2.8 billion euros, compared with 3.1 billion euros in 2023, and the adjusted sales profit margin was 14.6%, compared with 15.1% in 2023. The R & D expenditure of this sector in 2024 will be 1 billion euros, mainly used to invest in new platforms for light commercial vehicles that will be more flexible in the future, including the VAN.EA platform for pure electric models and the VAN.CA platform for fuel models.

At the same time as the financial report was released, Mercedes-Benz announced that it would implement a comprehensive corporate operation improvement plan to achieve a return to double digits in adjusted sales margins for the passenger car business. Judging from the series of measures it has announced, cost reduction is a major keyword.

Blue Whale Automobile learned from its earnings meeting that the company plans to reduce production costs by 10% in 2027.Building on the significant progress made in the past four years, the company will continue to work closely with suppliers to address material cost issues, and fixed cost reduction initiatives will continue into 2027.

According to the latest officially announced production capacity plan,In the next three years, Mercedes-Benz will maintain its production capacity at approximately 2 million to 2.5 million units, of which it will reduce its production capacity by 100,000 units in its base camp in Germany. We will not close factories in Germany. We will limit the production capacity of German factories, which is about 300,000 units per factory; at the same time, we will reduce the number of employees and adjust production capacity in this natural way. rdquo;Its executives said.

In the subsequent media phone conference, the proportion of layoffs in the German market attracted attention.

Mercedes-Benz executives responded that cost reductions cover all types of costs, including of course personnel costs. According to its disclosure, in addition to the European market, measures will also be promoted in other countries and regions. Taking the German market as an example, it will take measures in the indirect production sector to“We will not give a clear number for the number of layoffs, but our goal is to achieve the goals of the entire project. If savings are to be made in terms of personnel, we will do it in a responsible manner, as we have done for many years. rdquo;

Mercedes-Benz is not the only one facing the pain of transformation. German car circles have recently been exposed to huge personnel shocks. In addition to automakers, they also include industrial chain suppliers. Among them, Continental was revealed to plan to lay off about 3000 R & D positions by the end of 2026. The scope of layoffs is also mainly concentrated in Germany, especially factories in Babenhausen and Frankfurt; in response to the challenges of the tire business, Continental was also revealed to have closed five German factories. ZF Group has also been exposed to layoffs of 11,000 to 14,000 employees in Germany by the end of 2028, equivalent to more than 20% of its total local employees.

One set of data shows that the German automotive industry accounts for about 5% of the German economy and employs nearly 780,000 employees.As the birthplace of modern automobiles and the country with the longest history of producing automobiles, Germany has played a pivotal role in the century-old automobile history. However, affected by multiple challenges, it is currently experiencing a cold winter.

According to previous reports by Xinhua Agency, the German automobile industry will encounter a crossroads in 2025. On the one hand, auto parts supply chain companies have been bankrupt successively, the impact of layoffs and weak market demand; on the other hand, the European Union will implement new carbon emission regulations starting in 2025, and companies that fail to meet the standards may face fines of up to 16 billion euros. Taking the new EU regulations as an example, this means that most local car companies need to realize that one-fifth of their total car sales come from electric vehicles in order to avoid heavy penalties.

It is worth noting that, as the largest single market for most German car companies, the China market is constantly becoming the focus of the former’s bets. Mercedes-Benz is no exception.Data shows that Mercedes-Benz’s global sales in 2024 will be 2.389 million units, down 3% year-on-year.Among them, China is still the world’s largest single market for Mercedes-Benz, with cumulative sales of 714,500 vehicles in 2024, accounting for 30% of the total global sales.

While optimistic about the potential of the China market, Mercedes-Benz will continue to invest in the China market to help the group’s largest product offensive in history.It is reported that from 2025 to 2027, Mercedes-Benz will launch the most powerful product and technology offensive in the group’s history around the world, launching intensive and rich new and revitalized products, including launching a variety of exclusive products in the China market., covering all market segments and driving forms.

“To ensure that the company remains competitive in the increasingly changing environment of the future, we are taking steps to make the company leaner, faster, and stronger, and starting with the new CLA, we are launching a product offensive that includes a series of intensive new models. rdquo;said Ola K llenius, chairman of the board of directors of Mercedes-Benz Group AG.

Regarding the China market planning, Blue Whale Automobile learned from Mercedes-Benz,In 2025, the new pure electric long-wheelbase CLA model produced by Beijing Benz will be launched; in mid-2026, its new long-wheelbase GLE SUV model will be put into production; subsequently, Fujian Benz will launch a new luxury pure electric MPV based on the VAN.EA platform.

It is worth mentioning that Kang Linsong also said at the phone conference on the earnings report media thatIt was surprised by China’s achievements in the field of autonomous (intelligent) driving.It pointed out that in terms of competition, Mercedes-Benz will take the capabilities of other China players very seriously, including observing and analyzing what China competitors can do in the autonomous driving system, but it also believes that Mercedes-Benz’s competitiveness is not weak.According to Kang Linsong, Mercedes-Benz plans to release AI systems with a high level of intelligence, including terminal-to-terminal models, large language models, etc. These models will help improve the safety factor of Mercedes-Benz’s models to a very high level.