Mercedes-Benz (OTC:MBGAF) has unveiled an aggressive cost-cutting strategy to boost profitability in its car division, targeting a 10%+ return on sales despite a 40.5% drop in 2024 earnings.
Key Developments
1?? Slump in 2024 Earnings
? Return on Sales (2024): 8.1% (vs. 12.6% in 2023)? Total Sales: 1.98M vehicles (- lower expectations for 2025)? Dividend Cut: €4.30/share (down from €5.30 in 2023)
2?? 2027 Cost-Cutting Plan
? Reduce Production Costs by 10%? Launch Dozens of New Models? Streamline Operations for Higher Margins
3?? Weaker 2025 Outlook
? Expected returns: 6%-8% for car division.? Lower unit sales expected (<1.98M cars).? Labour representatives push for minimum 2M sales to sustain capacity.
Track Mercedes-Benz Financial Performance
? Balance Sheet API – Assess Mercedes’ financial health.? Earnings Calendar API – Stay updated on upcoming earnings reports.
Outlook
? Bullish Case: If cost-cutting succeeds and China/Germany demand stabilizes, margins could rebound.? Bearish Case: Declining sales and macroeconomic risks could drag profits lower.
Mercedes-Benz is in restructuring mode, with a leaner cost structure key to its future.