Mercedes-Benz plans substantial cost cuts amid Chinese competition

Mercedes-Benz Group, based in Stuttgart, Germany, announced plans on Thursday to implement significant cost reductions in response to weakening business conditions.

Mercedes-Benz plans substantial cost cuts amid Chinese competition

"We will reduce our costs by several billion euros annually in the coming years," a company spokeswoman told *dpa*. She did not elaborate on whether layoffs are being considered or specify which areas of the company would be affected by the cuts. Germany’s automotive industry has been grappling with substantial challenges, including the transition to electric vehicles and mounting competition in the Chinese market, which was previously a stronghold for German carmakers. Volkswagen AG, the largest auto manufacturer in Europe, has already warned of possible plant closures and mass layoffs in Germany, and reports suggest it is seeking pay reductions in ongoing labor negotiations. Mercedes-Benz acknowledged facing similar industry pressures and emphasized the need for cost adjustments to maintain competitiveness. "The global economic situation remains highly volatile. Sustained efficiency improvements are essential to ensure we remain financially strong and agile," the spokeswoman said. She noted that prior efforts to achieve substantial savings, including cuts to fixed costs, have positioned the company well. "We are proceeding with this strategy calmly but with steadfast determination," she added.