New chief executive Ola Kallenius cites electric car investment and diesel fines as reasons behind need to take decisive action
Jim Holder
14 November 2019

Mercedes has announced a plan to save £850 million by the end of 2022 in order to offset the cost of transitioning into electric and self-driving cars.

The move will include the loss of 10% of all management jobs, which is believed to equate to around 1100 employees.

During an investor conference led by chief executive Ola Källenius, who took over from Dieter Zetsche in May, the German firm revealed it has spent an additional £430m on electric car development this year, as well as paid around £750m to regulators after admitting that 700,000 diesel cars it sold didn’t meet emissions regulations.

“The industry is in transformation,” said llenius. “The expenditure needed to achieve the [European Union’s] CO2 targets require comprehensive measures to increase efficiency in all areas of our company.”

Mercedes is under particular pressure to meet European emissions targets by next year, with the firm struggling to hit the 95g/km average from its current average of 138g/km for all cars sold.

While it's able to offset some of that risk through super-credits earned by sales of electric vehicles, such as the Mercedes-Benz EQC, failure to hit targets could cost it billions of euros in fines.

Parent firm Daimler has already issued two profit warnings in 2019, and llenius warned that margins would fall to 4% this year and rise to only 6% by 2022. He also cautioned that the rising trade war between the US and China, plus the impact from Brexit, could wipe out a further 1%, threatening to give the firm smaller margins than many mainstream car makers.

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Comments
6

14 November 2019

Where are all the usual culprits who come on here and blame Brexit at any sign of bad news in the car industry?

Mike Hawes from SMMT will obviosly be silent because job losses in the motor industry don't happen outside our borders. No doubt his German counterpart will be blaming the Green Party and telling everyone Global warming doesn't exsist therefore no need to invest in battery cars.

 

14 November 2019
scotty5 wrote:

Where are all the usual culprits who come on here and blame Brexit at any sign of bad news in the car industry?

Mike Hawes from SMMT will obviosly be silent because job losses in the motor industry don't happen outside our borders. No doubt his German counterpart will be blaming the Green Party and telling everyone Global warming doesn't exsist therefore no need to invest in battery cars.

 

 

Why would they blame Brexit? Merc have already stated they are cutting jobs due to Diesel emmisions fines. Did you read the article. Tesla on the pother hand have said Brexit played a part in their decision not to manufacter here. So they chose Germany instead. Maybe you should actually read the articles before commenting!?

14 November 2019
Dilly wrote:

Why would they blame Brexit? Merc have already stated they are cutting jobs due to Diesel emmisions fines. Did you read the article. Tesla on the pother hand have said Brexit played a part in their decision not to manufacter here. So they chose Germany instead. Maybe you should actually read the articles before commenting!?

Sarcasim is lost on you. There are people who've blamed Brexit for things totally unrealated to the UK leaving the EU, so why should this news be any different to them?

PS - please don't preach to others about reading articles.

As for Tesla's comment - anyone with sense takes anything Musk says with a pinch of salt. Nobody knows if Brexit played a part in Tesla's decision, but if it did, then Germany would be the last place in Europe to build a factory. Even the German car manufacturers are moving production outside Germany due to financial benefits.

If he is going to build that plant in Germany then no wonder his company can't turn a profit.

14 November 2019

Musk was never going to build in the UK.

Brexit aside, the attitude of the Brits, the lack of anything he finds attractive in terms of incentives plus the terrible rep of any vehicle manufactured in this country has not helped.

Shame

15 November 2019
scotty5 wrote:

Dilly wrote:

Why would they blame Brexit? Merc have already stated they are cutting jobs due to Diesel emmisions fines. Did you read the article. Tesla on the pother hand have said Brexit played a part in their decision not to manufacter here. So they chose Germany instead. Maybe you should actually read the articles before commenting!?

Sarcasim is lost on you. There are people who've blamed Brexit for things totally unrealated to the UK leaving the EU, so why should this news be any different to them?

PS - please don't preach to others about reading articles.

As for Tesla's comment - anyone with sense takes anything Musk says with a pinch of salt. Nobody knows if Brexit played a part in Tesla's decision, but if it did, then Germany would be the last place in Europe to build a factory. Even the German car manufacturers are moving production outside Germany due to financial benefits.

If he is going to build that plant in Germany then no wonder his company can't turn a profit.

 

Take Musks comments with a pinch of salt because they don't conform to your view of the world. LOL ok bud! You kno why Musk chose Germany over Musk himself. Very interesting! Like I said, you shouyld learn to read articles.

 

FM8

14 November 2019
Well, I blame Brexit. Spilt coffee on my desk today, that was Brexit as well.

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