Transportation
Mercedes Warns Car Margin May Slump to Lowest Since 2020
- Automaker pledges to cut production costs by 10% through 2027
- Carmaking margin may drop to as low as 6% this year, from 8.1%
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Mercedes-Benz Group AG expects its carmaking margin to drop to as low as 6% this year as it grapples with fierce competition and uneven demand in the global auto market.
The manufacturer plans to reduce production costs by 10% through 2027 and will work with suppliers to lower material expenses, it said Thursday. After pledging to boost margins to a minimum of 8% less than three years ago, the new guidance marks a blow to Mercedes’ strategy of shifting upmarket to secure higher returns.