How Mercedes’ slimming (and electric) cure will be
Mercedes Benz focuses on electric cars and cuts costs by more than 20% by 2025
Slimming cure for Mercedes Benz: the Daimler group company is ready to make major cost cuts and shift investments to electric cars, aiming to accelerate the transition to batteries.
All the details.
THE ELECTRIC TURN
Let's start with the electric turn. Mercedes, as described in the presentation of the new corporate strategy, aims to accelerate the development of electric motors and software for cars, investing in new technologies that improve range and efficiency.
According to the new strategy, the company will bring on the market more than 20 “xEV” models, purely electric or hybrid models, by 2022.
SALES OBJECTIVES
Ambitious not only the programs but also the sales objectives. The German auto maker plans to drive car sales from 2% in 2019 to 9% this year and 15% next year and over 50% by 2030.
MERCEDES TOWARDS DRASTIC CUT OF EMISSIONS
If strategy and objectives are achieved, Mercedes will be able to drastically cut emissions, achieving the goal of reducing CO2 emissions from new cars by an average of 50 by 2030 without any particular problems .
MERCEDES BETS ON LUXURY MODELS
In addition to the battery, Mercedes is also aiming for luxury. In fact, the company aims at the luxury segment, from which it hopes to obtain double-digit margins and a return on sales in a "mid to high single-digit" range, ie between about 5 and 9%, even in market conditions. unfavorable by 2025.
THE REDUCTION OF COSTS
Mercedes' strategy also includes a serious slimming cure. As stated in the press release, corporate fixed costs will be reduced by more than 20% by 2025 in absolute terms compared to the 2019 forecast. Expected “a reduction in spending, capacity adjustments and lower personnel costs. Capital and R&D expenditures are also expected to decrease by more than 20% by 2025 compared to 2019. Variable costs will be reduced by 1% net annually from the 2019 level over the period to 2025, including targets increased and prolonged savings in material costs ".
THE DIFFICULTIES OF THE DAIMLER GROUP
The cuts are not surprising. The lockdown led to a drastic drop in the total sales of the Daimler Group , the parent company of Mercedes: they fell by 34% to 541,800. Revenues dropped significantly by 29% to € 30.2 billion, compared to € 42.7 billion in Q2 2019.
The EBIT recorded is minus 1,682 million euros (2nd quarter 2019: minus 1,558 million euros). The group's losses amounted to 1,906 million euros, against the loss of the second quarter of 2019 of 1,242 million euros.
EMPLOYEE CUT
And precisely because of these numbers, rumors of a major employee cut continue to chase each other. Daimler is believed to be ready to cut over 30,000 employees. According to Handelsblatt , the company plans to cut 20,000 jobs, more than the 15,000 at risk that Human Resources Director Wilfried Porth spoke about.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/come-sara-la-cura-dimagrante-ed-elettrica-di-mercedes/ on Wed, 07 Oct 2020 05:15:58 +0000.