Various Mercedes-Benz vehicles are assembled in the “Factory 56” production hall.
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Mercedes Benz Further costs and gasoline and diesel vehicles were announced Thursday to restore margins as the company saw revenue declines in 2025 compared to electric vehicles in the new product line.
The German luxury car maker will release 19 new combustion engine models and 17 battery electric vehicles by the end of 2027, a sign that it will focus on its combustion engine products after battery power sales collapsed from last quarter to quarter.
Most new models will be at the highest price tier, indicating that the automaker remains committed to its strategy of selling lower volumes of high-margin vehicles, although some investors and labor representatives have expressed concerns about the strategy’s failure in recent months .
“The remaining value strategy has not been abandoned yet,” said Harald Wilhelm, chief financial officer.
William said the automaker will also carry out more production in China and the U.S. to protect itself from rising trade tensions, including threats from the U.S. president. Donald Trump From April, a 25% tariff on imports of all vehicles.
The company’s stock fell 1.5% to 1011 GMT, which is the biggest loser in the Blue Chip Euro Stoxx 50E index, as some investors expect more news about return on capital.
Mercedes-Benz’s forecast will highlight investors’ focus on its tough global market capabilities as German automakers’ long-term successful export of cars and deploying their technological strength is subject to more protectionist US and Chinese EV competition The threat from the opponent.
“Luxury and China simply don’t work, which is crucial to the success of the Stuttgart-based automaker’s business,” said investment strategist Jürgen Molnar at broker Robomarkets.
A bleak prospect
Mercedes Benz said revenue will drop further this year after revenue fell 30% in 2024 and 40% in its automotive division fell.
The bleak prospect is a sober re-evaluation of the more optimistic vision of the last capital market day in 2022, with adjusted ROI as high as 14% in good times and no less than 8% in difficult times.
The European automotive industry faces a series of challenges this year. public Other automakers, as well as component manufacturers, announced in-depth layoffs when executives warned that energy and labor costs in the region had become uncompetitive.
Mercedes-Benz plans to reduce production costs by 10% in 2027 and triple them in 2030, which is beyond the ongoing plan to reduce costs by 20% between 2019 and 2025.
Its chief financial officer said Thursday it will not shut down German plants, but it will transfer production of one of its models from its domestic market to factories in Hungary, where costs are reduced by 70%.
He added that it will also outsource from financial and human resources to procurement and reduce the size of the workforce by not replacing retired and negotiating voluntary layoffs.
The automaker suffered attacks last year in its major markets in China and Germany, outperforming the premium automaker Audi but worse than BMW, which reversed the trend with higher speeds in electric car sales.
Mercedes-Benz will spend a lot of resources to develop its market share in China over the next five years, but will stay away from what CTO Markus Schaefer calls an “irrational decision” of competitors’ price reduction.
