Mercedes-Benz just launched the new AMG GT Black series this week, strengthening the brand’s dominance in the high-powered coupe segment. While all of this is going on, Mercedes’ parent company Daimler faces a financial problem. The German company is reported to have suffered a second quarter operating loss of 1.68 billion euros ($ 1.91 billion) due to the feared coronavirus pandemic.
This led the company to reduce its production and we all know which segment will be affected. With SUVs emerging as primary cash cows for Stuttgart, production of Mercedes sedans halts, at least for North America.
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According to a report by ReutersMercedes is seeking to stop production of the Tuscaloosa, Alabama, Class C sedan. In addition, the automaker will also stop manufacturing Class A in Aguascalientes, Mexico. Both plants will continue to make SUVs more profitable.
“Our systematic efforts to reduce the balance of the company by reducing costs and adjusting capacity should continue,” said Mercedes-Benz CEO Ola Kaellenius in a statement in the Reuters report.
Low demand for cars during the pandemic is not the only adversity Daimler faced. It spent 129 million euros ($ 147 million) on purchases and early retirement, as well as 687 million euros ($ 785 million) on the restructuring of its worldwide production of Mercedes vehicles.
In addition, Daimler is also looking to save 2 billion euros a year through cutbacks, which equates to 20,000 jobs, according to Handelsblatt, a German newspaper. The company is also considering selling its plant in Iracemapolis, Brazil, while an extension to the Kekskemet, Hungary plant will be more likely to hit a roadblock.
