Daimler will continue to cut costsJuly 9, 2020
According to CEO Ola Callenius, Daimler will deepen cost reductions due to expected operating losses in the second quarter, despite some signs of recovery in demand for luxury cars.
According to Daimler, in the first half of the year, sales of its Mercedes-Benz brand fell by almost 19% to 870,000 cars, although in the second quarter the brand achieved its best sales results in China. At the annual meeting of the automaker, Callenius told shareholders that despite a recovery in the PRC, business losses accumulated in recent months cannot be recovered by the end of the year, so further cost reductions are required.
“Our previous performance goals covered the upcoming transformation, but not the global recession. That is why we are exacerbating our course, ”said Callenius, adding that the company is negotiating with employees about savings.
The restructuring plan, which Callenius announced in November, called for reducing the company’s workforce by more than 10,000 to save € 1.4 billion in staff costs by 2022. The company expects recovery before the crisis drags on for a long time. Reporting the results of the second quarter, Daimler said that during this period there was a significant decrease in sales, negative indicators of operating profit and free cash flows in the industrial business.
“The group’s sales, revenue and profits this year are likely to be lower than in 2019,” said Callenius, adding that Daimler AG will be able to quickly increase production as soon as demand increases again. “Already in June, world retail car deliveries were again slightly higher than last year.”
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