Mercedes-Benz to Cut Workforce in China Amid Market Challenges
Mercedes-Benz Announces Workforce Cuts in China: Reasons and Impact
Mercedes-Benz to Cut Workforce in China Amid Market Challenges
Mercedes-Benz plans to reduce up to 15% of its workforce in China by 2027 due to shrinking profits and growing competition. Learn more about the reasons behind this decision.
2025-02-28T11:06:46Z
2025-02-28T11:06:46Z
2025-02-28T11:21:21Z
News, Production
Mercedes-Benz has announced plans to reduce up to 15% of its workforce in China by 2027, primarily affecting its financial and sales divisions, including Mercedes-Benz Automobile Finance Co and Beijing Mercedes-Benz Sales Service Co. The move comes amid shrinking profit margins, intensifying competition, and declining demand for premium cars in the country.
Once the world’s most promising market for luxury automakers, China is now proving to be a tough challenge for European brands. A sluggish economy, weakening consumer confidence, and fierce competition from domestic manufacturers are taking their toll. In Q3 2024, Mercedes-Benz’s profit margin dropped to 4.7%—well below the company’s 8% target.
Electrification has been a particularly difficult area for the brand. Sales of Mercedes-Benz EVs in China plummeted by 31% in a single quarter, while local competitors like BYD continue to expand. Other German automakers are facing similar struggles—BMW saw a 13.4%% decline in sales in China, while Audi’s sales fell by 12%%.
The company has already begun reducing staff by not renewing fixed-term contracts. Looking ahead, Mercedes-Benz aims to cut production costs by 10% by 2027 and 20% by 2030. However, cost-cutting alone may not be enough to regain lost ground. The automaker plans to launch 19 new combustion engine models and 17 electric vehicles by the end of 2027.
For now, Mercedes-Benz’s strategy in China appears to be a reaction to a rapidly shifting market. The big question remains: can the brand successfully adapt, or will its position in China continue to erode?
Source: autoblog.com
Mercedes-Benz plans to reduce up to 15% of its workforce in China by 2027 due to shrinking profits and growing competition. Learn more about the reasons behind this decision.
Mercedes-Benz has announced plans to reduce up to 15% of its workforce in China by 2027, primarily affecting its financial and sales divisions, including Mercedes-Benz Automobile Finance Co and Beijing Mercedes-Benz Sales Service Co. The move comes amid shrinking profit margins, intensifying competition, and declining demand for premium cars in the country.
Once the world’s most promising market for luxury automakers, China is now proving to be a tough challenge for European brands. A sluggish economy, weakening consumer confidence, and fierce competition from domestic manufacturers are taking their toll. In Q3 2024, Mercedes-Benz’s profit margin dropped to 4.7%—well below the company’s 8% target.
Electrification has been a particularly difficult area for the brand. Sales of Mercedes-Benz EVs in China plummeted by 31% in a single quarter, while local competitors like BYD continue to expand. Other German automakers are facing similar struggles—BMW saw a 13.4%% decline in sales in China, while Audi’s sales fell by 12%%.
The company has already begun reducing staff by not renewing fixed-term contracts. Looking ahead, Mercedes-Benz aims to cut production costs by 10% by 2027 and 20% by 2030. However, cost-cutting alone may not be enough to regain lost ground. The automaker plans to launch 19 new combustion engine models and 17 electric vehicles by the end of 2027.
For now, Mercedes-Benz’s strategy in China appears to be a reaction to a rapidly shifting market. The big question remains: can the brand successfully adapt, or will its position in China continue to erode?
