Mercedes-Benz launches cost-cutting plan after 28.4% net profit loss in 2024

By Halis Sunnetci

ISTANBUL (AA) - Mercedes-Benz reported a 28.4% drop in net profit in 2024, falling from €14.53 billion ($15.5 billion) in 2023 to €10.41 billion ($10.9 billion), as the German luxury automaker unveiled a new strategy to cut costs and enhance competitiveness.

The Stuttgart-based company’s earnings before interest and taxes (EBIT) fell 30.8% to €13.6 billion ($14.3 billion), while its group revenue declined 4.5% year-over-year, dropping from €152.4 billion ($159.5 billion) to €145.6 billion ($152.5 billion).

To address the slowdown, Mercedes-Benz announced a "Next Level Performance" program, aiming to reduce production costs by 10% until 2027 and boost sales through an aggressive product rollout. The company has already cut fixed costs by 19% between 2019 and 2024.

"We're launching the company’s biggest ever product and tech campaign," CEO Ola Kallenius said.

The first model under this initiative, the new CLA compact sedan, will debut in 2025, available with both an electric drivetrain and a 48-volt hybrid engine. In 2026, Mercedes-Benz will introduce an all-electric GLC and C-Class, followed by additional electric and hybrid models under its AMG division.

The automaker is also adopting a "digital-first" approach, using AI to streamline management operations and improve efficiency.

Despite the financial setback, Mercedes-Benz expects sales to gain traction by 2027, as multiple new and refreshed models hit the market.