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Daimler wants to Reduce its Fixed Cost by more than 20% by 2025

FRANKFURT, Oct.6 (Reuters) – Daimler on Tuesday announced plans to cut fixed costs, investments and research and development spending by more than 20% by 2025 from 2019 levels as part of a change of strategy aimed at further repositioning the Mercedes-Benz brand in the high-end segment.

The German automotive group is targeting a double-digit operating margin thanks to a doubling of sales of the Maybach brand and an increase in sales of AMG and G-Wagon.

“We will aim for higher profitability, we will be margin-driven, we will increase the margin of the current portfolio and invest in luxury and high-end products,” said CFO Harald Wilhem, during the presentation of the group policy.

Daimler wants to achieve an operating margin between the middle and the top of a single-digit range by 2025 even under adverse market conditions, the group said.

The Stuttgart manufacturer has already reduced its costs to deal with the pandemic linked to the coronavirus which has forced it to show an operating loss in the first and second quarters.

To reduce its losses, Mercedes-Benz ceased production of sedans in the United States to focus on SUVs, which are more profitable. The group also suspended its cooperation with BMW on an autonomous car development project.

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