AutoBeta(AutoBeta.net)07/19 Report--

Due to the shrinking market and the impact of novel coronavirus, car companies have been unprecedentedly affected in terms of sales and revenue. In order to reduce costs, layoffs and discontinued production of some unprofitable models have become the current choice of more and more car companies. Daimler will stop production of some Mercedes-Benz models in the United States and Mexico, Reuters reported.

According to foreign media reports, Daimler will stop the production of Mercedes-Benz models in the United States and Mexico, including A-class cars at the factory in Aguascalentes, Mexico, and switch to the higher-margin SUV GLB.

At the same time, production of the C-Class sedan in Tuscaloosa was halted, while the plant in Alabama produced only the SUV. There was also news that the future Tuscaloosa plant in Alabama would focus on producing electric models, forcing the production of C-class cars to be stopped.

This means that the United States will no longer be the place where C-Class cars are produced. In the future, Mercedes-Benz C-Class will only be produced in Germany, South Africa and China, while A-Class models discontinued in Mexico will continue in Germany. However, no matter it is a class A car or a class C car, the authorities have not given a specific time to stop production.

The reason for Daimler's discontinued production of some Mercedes-Benz cars in North America is that the company is expected to suffer heavy losses during the coronavirus pandemic. According to Daimler's second-quarter unaudited results, second-quarter profit before interest and tax lost 1.682 billion euros (about 13.389 billion yuan), net industrial liquidity was 9.5 billion euros (about 75.62 billion yuan), demand fell in the second quarter, resulting in Daimler's adjusted second-quarter EBIT of 708 million euros (about 5.635 billion yuan).

Of this total, the operating loss of Mercedes-Benz's car and truck business was 1.13 billion euros, compared with an adjusted operating loss of 284 million euros. Although sales of the Mercedes-Benz brand in China hit a record high in the second quarter of this year, total sales fell 19 per cent to 870000 vehicles in the first half, according to Daimler.

Ola Kaellenius, chief executive of Daimler, said, "

"despite the rebound in the Chinese market, the business losses accumulated in recent months may not be able to recover before the end of the year," Mr Kang said. "there is a need to further cut costs and reduce resistance to the company's balance of payments by reducing costs and adjusting production capacity." The discontinued production of some Mercedes-Benz cars is one of the measures.

According to Mercedes-Benz sales data in China in the first half of the year, the Mercedes-Benz brand won the top spot among luxury brands in China with cumulative sales of 346000 vehicles, significantly better than other regional markets. This is also due to the best-selling C-Class and E-Class of Beijing Mercedes-Benz. The annual sales of Mercedes-Benz E-Class and Mercedes-Benz C-Class were 73800 and 73400, second only to the best-selling models after Mercedes-Benz GLC (76900), according to the Federation of passengers.

In terms of Mercedes-Benz sales in all regions, Mercedes-Benz sales in Europe were 313500, down 31.5% from the same period last year; in the Asia-Pacific region, sales were 458300, down 4.2% from the same period last year; and in North America, sales were 146500, down 16% from the same period last year. Among them, as the core market in North America, the United States only had 12.72 vehicles in the first half of the year, down 13.7% from the same period last year.

In addition to the severe impact on Mercedes-Benz's performance in the United States under the coronavirus pandemic, we can also see that Mercedes-Benz cars in the United States are not as easy to sell as SUV models, and the company's profits have been seriously damaged. Reducing costs by reducing slow-selling models has become an important measure for major car companies. Previously, Ford and General Motors both made the same plan in the United States.

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