Currently reading: Mercedes-Benz set for major job cuts as profits fall
Legal costs and electrification have hit profits, but firm says it's committed to pursuing 'CO2-neutral mobility'
James Attwood, digital editor
News
2 mins read
11 February 2020

Mercedes-Benz parent company Daimler has announced a sharp fall in profits last year, the result of a major fine related to the diesel emissions scandal, the cost of investing in future technology and its struggling vans division.

Daimler Group posted a net profit of £2.3 billion in 2019, compared to £6.4bn the previous year. Company boss Ola Källenius said the firm “cannot be satisfied with our bottom line” and that it would implement a series of cost-cutting measures to ensure it could continue to invest in electrified technology, including battery electric and plug-in hybrid powertrains, for the future.

The Daimler Group – which comprises the Mercedes-Benz Cars, Vans, Trucks, Buses and Mobility divisions – sold 3.34 million vehicles last year, close to the 3.35m sold in 2018. That resulted in revenue of £145.5bn, up 3% on the previous year.

The German firm was hit by legal costs, including a £769m fine for a case brought by German prosecutors over the sale of various diesel models suspecting of featuring measures to manipulate exhaust emissions. It also faced extra expenses due to an airbag recall.

While Mercedes-Benz Cars sold a record 2,385,400 cars, the group was hit by the performance of its Vans division, which recorded a £2.6bn loss.

Like other car makers, Daimler has invested heavily in technology relating to electrification, connectivity and autonomy in recent years, and Källenius said that would continue despite the disappointing results.

He said that “the future of the Daimler Group lies in CO2-neutral mobility as well as in consistent digitisation, leveraging its full potential in our products and our processes".

He added: “To achieve that, we have substantially ramped up our investments into new technologies. We are determined to materialise our technological leadership and at the same time to significantly improve profitability.”

The cost-cutting measures include the target to cut spending on employees by £1.2bn by the end of 2022. The Daimler Group currently employs 298,655 people, and reports in Germany suggest that around 15,000 roles could be axed. Daimler said that it would “cut jobs worldwide in a socially responsible manner, including the reduction of management positions.”

READ MORE

Daimler fined by German prosecutors in latest diesel emissions case

Mercedes to cut 1100 jobs as part of £850m saving plan

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11 February 2020

If they are that strapped for cash they will definitely pull out of F1. That means we will probably see Lewis Hamilton in a Ferrari in the 2021 season! 

MB's van business is losing money beacuse they make them in high cost Germany, the only company making money on vans is Ford beacuse they make them in extra low cost Turkey. Even VW want to do a deal with Ford on vans.

11 February 2020
jagdavey, this deal V W has with Ford is for which vans ?

11 February 2020

I see Mercedes  have just withdrwn their glitzed up pickup based on the Nissan. Anyone  could see that was doomed to fail. Who at Mercedes thought that one out ?, £2,000 more for what I askThey have too many models in their car range and the Sprinter van is a rust box . Their custeomer service is renowned for arrogance towards thier clients. Merccedes you are now a builder of non premium cars and are suffering from this. Stack em high and sell them on finance   is not premium 

11 February 2020

I thought the Vito/V class are made in Spain? PSA make van profits too. Next Transporter is to be a JV with Ford (Transit).

11 February 2020

And the VW Amarok has been withdrawn pending replacement by a re-baged Ford Ranger.

11 February 2020

I've had a couple of mid range new Mercedes. The problem is they're no longer exclusive are they. Even in the 1990's a person with a new E Class was perceived as wealthy, now they're a cheaply leased private hire car. I'd say Mercedes have lost their glamorous appeal to many. Plus let's tell the truth, only the S class, SL and CL were great anyway. Nice big engines and plush interiors that felt special. 

11 February 2020

As "Sunshine" says MB, BMW & Audi & co are not premium anymore. They've expanded their product ranges to cover the whole market segments that only used to be serveved by Ford & Vauxhall & the others. Now they are everywhere, not an exclusive luxury product anymore. They should concentrate on their core products, not A, B, class etc., that way they would make decent profits again. In the Eighties MB & Mercedes only had a 3 product range. They've expanded into every segment too rapidly & with electrification they've got to go back to that simplified product line up.

11 February 2020
Just look at other LUxury brand such as Rolex, Chanel, Louis Vuitton etc. They’ve actually tripled or quadrupled their prices in the last 15 years and sales are stronger than ever with waiting lists for some items. An air of exclusivity and excitement was introduced making people pay more and even go on waiting lists. I’d argue if they’d gone into M&S or Next or Seiko territory then they would have shot theirselves in the foot. Maybe a lesson there for car makers?

12 February 2020
Sunshine wrote:

Just look at other LUxury brand such as Rolex, Chanel, Louis Vuitton etc. They’ve actually tripled or quadrupled their prices in the last 15 years and sales are stronger than ever with waiting lists for some items. An air of exclusivity and excitement was introduced making people pay more and even go on waiting lists. I’d argue if they’d gone into M&S or Next or Seiko territory then they would have shot theirselves in the foot. Maybe a lesson there for car makers?

Luxury watches (and other luxury items) are not analagous to cars.

11 February 2020

I wonder how Mike Hawes and other remoaners are going to blame Boris and Brexit for this one?

 

 

 

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