Mercedes-Benz will step up cost-cutting measures after profits halved in the third quarter of the year as fierce competition and weaker demand in China hit profits.
The company’s profit margin fell to 4.7% in the third quarter, well below its minimum target (8%) but also the 12.4% it was a year ago. The German company cut its full-year profit margin target twice during the third quarter with the drop coming after sales of its most expensive cars, such as the S-Class, fell during the period.
The results of the third quarter did not meet our expectations. We will intensify all efforts to further increase efficiency and cost improvements across the group,
said Mercedes-Benz Chief Financial Officer Harald Wilhelm.
While Mercedes-Benz has pledged to cut costs, it has not specified where the cuts will be made. The manufacturer operates several factories in Germany, where labor and energy costs are relatively high. It also invests heavily in research and development for electrification, producing both electric and internal combustion engine models in its extensive network of factories.
Mercedes’ third-quarter revenue was 34.5 billion euros, down about 7 percent from the same period last year. Earnings before interest and taxes fell to €2.52 billion, down 48% from the same period last year.
Source: www.autoblog.gr
