Measures to increase the performance of the Stuttgart-based car manufacturer
Mercedes-Benz Group AG recently presented a major product and technology offensive. The Stuttgart-based car manufacturer also presented various measures to increase performance.
Ola Källenius, Chairman of the Board of Management of Mercedes-Benz Group AG, explained: "Mercedes-Benz is an iconic brand. It is our responsibility to leverage its full potential. To this end, we are launching the largest product and technology offensive in our company's history and a comprehensive program to increase our performance."
The company intends to launch numerous new and updated models on the market by 2027. According to the press release, this year will begin with the Mercedes CLA.
Mercedes-Benz is setting standards with modern technology. According to the company, this includes a new steer-by-wire system and a fully integrated "tech stack" - i.e. a steering system without a mechanical connection between the steering wheel and wheels, as well as a platform of software components that build on each other.
Costs
According to the press release, the car manufacturer is planning to reduce its cost base. Accordingly, Mercedes-Benz plans to reduce its production costs by 10 percent by 2027. According to the company, it has already adjusted its nominal production capacity in recent years.
Global production capacity for passenger cars will be reduced from 2.5 million units in 2024 to between 2 and 2.2 million units by 2027. The flexibility for readjustment is to be maintained as soon as the product offensive gains momentum. The closure of plants in Germany is not planned.
With regard to material costs, the Mercedes purchasing and engineering teams are in dialog with the suppliers, according to the company. Material costs are to be reduced by setting ambitious targets - in partnership and in close cooperation with the suppliers. According to the car manufacturer, key suppliers will be integrated even earlier and more deeply into the development processes.
According to its press release, the car manufacturer is aiming to reduce its fixed costs by more than 10 percent over the next three years. Between 2019 and 2024, Mercedes-Benz has already achieved an inflation-adjusted reduction in fixed costs of 19 percent, according to its own statement.
Harald Wilhelm, CFO of Mercedes-Benz Group AG, believes that the company is well positioned to achieve double-digit margins again in the near future.