Plus   Neg

Mercedes-Benz Targets Higher Profitability

Mercedes-Benz said it will improve its profitability and cash generation and take actions to prepare for the future and to accelerate the transition to electric drive. It will take significant new steps to reduce the cost base and improve the industrial footprint in the period to 2025.

At a virtual investor and analyst conference, the company said it will cut fixed costs by more than 20% by 2025 in absolute terms compared to the 2019, through reduced spending, capacity adjustments and lower personnel costs.

Capex and R&D expenditure are set to decrease by more than 20% by 2025 compared to 2019. Variable costs will be reduced by 1% net per annum compared to the level of 2019 during the period until 2025.

By 2025, Mercedes-Benz AG aims for a return on sales (RoS) level within a mid to high single-digit range, even under unfavorable market conditions. The company's ambition is to achieve a double-digit margin in a strong market environment.

Mercedes-Benz noted that it will introduce the all-electric architecture in 2021. At the same time, the company will continue to electrify the most successful platforms.

As part of its "Ambition 2039" initiative, Mercedes-Benz said it is working on offering a CO2-neutral new car fleet less than 20 years from now. The company wants electrically powered cars including all-electric and plug-in hybrid vehicles to account for more than half of its sales already by 2030.

Meanwhile, Global passenger car sales of Mercedes-Benz for the third-quarter increased 3.9% year-over-year to 613,770 units, due to the positive development in China and rising customer demand in many other markets.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
Santa Cruz Bicycles LLC has recalled certain model year 2020 bicycles with aluminum frames citing fall risks, according to the U.S. Consumer Product Safety Commission. The recall involves about 2,900 units of model year 2020 Auminum Santa Cruz and Juliana Bicycles. In addition, about 216 were sold in Canada. AstraZeneca is mulling an additional global trial to confirm the 90% efficacy rate of its Covid-19 vaccine candidate at lower dosage, Bloomberg news quoted Chief Executive Officer Pascal Soriot as saying. In an interview, Soriot noted that instead of adding the trial to an ongoing U.S. process, the company might launch a fresh study to evaluate efficacy of lower dosage of its vaccine that perform U.S. airline Delta Air Lines, Inc. and its Italian codeshare partner Alitalia are planning to launch quarantine-free, COVID-free flights between U.S. and Europe through new testing protocols, starting in December. In a statement, Delta said it has signed deals with airports and governments eliminating quarantine requirements on COVID-tested flights connecting Atlanta and Rome.
Follow RTT