Published by Global Banking and Finance Review
Posted on December 16, 2024
BERLIN (Reuters) - Mercedes-Benz's works council chief said the carmaker must urgently win back market share and rethink its China strategy so sales did not drop below 2 million a year, which he said would be "unacceptable" to labour representatives.
"We would not be satisfied with any less than two million cars a year - we need that to use our German sites to capacity," Ergun Lümali said in an interview with German newspaper Frankfurter Allgemeine Zeitung (FAZ) published on Monday.
"It would be fatal if we as a company relied on significantly lower numbers in the long-term."
His comments come as tension increases between management and labour representatives in Germany's car industry over how to protect market share in the face of cheaper competition from China. Executives insist they must make deep cuts to survive while labour representatives blame management for misguided strategies.
Mercedes-Benz Cars sold 1.46 million cars in the first nine months of this year, down 4.3% from the same period of 2023, with demand hit particularly by weakness in China's economy and EV-only sales trailing far behind BMW.
The luxury carmaker expects full-year sales slightly below 2023's 2,043,800 units.
Chief Executive Ola Kaellenius in 2020 turned back a decades-old strategy of chasing sales volume to focus on the industry's most profitable segments, launching a programme to cut costs by over 20% by 2025 to take the brand further upmarket.
But some investors have advised the carmaker to amend that strategy, with premium EV models failing to take off in China in the same way as more affordable cars have done.
"We need growth, growth, growth," said Lümali to FAZ. "New strategies are needed."
(Reporting by Victoria Waldersee, editing by Kirsti Knolle, Kirsten Donovan)
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