Daimler will stop production of sedans in the US and MexicoJuly 18, 2020
The loss in the second quarter was less than expected, and still amounted to almost $ 2 billion.
Daimler said Thursday it will stop production of Mercedes-Benz sedans in the United States and Mexico as part of cost-cutting measures to optimize production, saying second-quarter operating losses will be less-than-expected at € 1.68 billion (1 , 91 billion USD), having previously posted profit by 23 July.
The downturn in demand caused by the closure of dealerships due to the crisis amid the coronavirus pandemic forced Daimler to report a second quarter adjusted loss before interest and taxes (EBIT) of € 708 million over the same period.
At its Mercedes-Benz Cars & Vans division, the company reported an operating loss of € 1.13 billion and an adjusted operating loss of € 284 million.
Daimler said it spent € 129 million on restructuring in the second quarter, which includes a staff buyout at Mercedes. He also announced a € 105 million valuation adjustment for his YOUR NOW car-sharing joint venture.
Daimler also said it has incurred restructuring costs of € 687 million to retool its global production network of Mercedes-Benz passenger car plants.
It will discontinue production of the compact A-Class at its plant in Aguascalientes, Mexico to focus on a new, more marginal sports utility vehicle, the GLB. In addition, Mercedes-Benz will cease production of the C-Class sedan in Tuscaloosa, leaving the Alabama-only SUV plant. Daimler has already announced that it is preparing to sell its plant in Hambach, France.
“Our systematic efforts to reduce the company’s break-even point through cost cuts and capacity adjustments must continue,” said CEO Ola Kellenius.
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