Mercedes-Benz is making strategic moves in China to reduce office-related costs by 25% by 2027, with plans to cut 10-15% of sales and finance jobs, as reported by Reuters. Despite these layoffs, the company’s 2,000 employees in research and development at Mercedes-Benz China will remain unaffected, according to an anonymous source.
Facing stiff competition from local rivals, the German luxury carmaker is focused on retaining its market share in China. Globally, Mercedes-Benz is implementing cost-cutting measures and has cautioned that its 2025 earnings are expected to see a significant decline.
However, the company remains committed to investing in China to maintain and strengthen its market position, particularly in the electric vehicle (EV) segment. Mercedes-Benz is also exploring partnerships with local suppliers to enhance the competitiveness of its products.
A spokesperson mentioned to Reuters that the cost-cutting targets could be adjusted depending on market conditions. Mercedes-Benz CFO Harald Wilhelm has informed investors that the BBAC joint venture with BAIC Motors is working towards reducing material costs by more than 10% and production costs by over 20%.
Wilhelm stressed that the cost-cutting initiative is aimed at optimizing operations to ensure profitability. Additionally, Mercedes-Benz plans to ramp up local production in China and the US to mitigate the impact of escalating trade tensions.
In a recent development, Mercedes-Benz is reportedly considering the sale of its car-leasing unit Athlon as part of a broader operational review. While discussions with potential buyers are underway, a final decision on the sale has not been reached yet.
As Mercedes-Benz navigates through these strategic changes and cost-cutting measures, the company remains committed to maintaining its brand presence and competitiveness in the dynamic automotive market landscape.
