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Published on : Feb 06, 2015

Daimler will soon be launching an efficiency program at the division of Mercedes cars as a measure for reducing its ever increasing cost base since the company is aiming at achieving record auto sales, profit, and revenue during the current year.

Over the past couple of year, Daimler has failed to reach the high margins that were generated by Audi and BMW, and the company is currently employing quite a large workforce for Mercedes, in spite of Mercedes selling lesser number of cars when compared with its two main competitors. The CEO clearly stated that new measures have been taken which will be a part of the “Next Stage” program of Daimler’s. This program is expected to help the Mercedes division to achieve a margin target of 10% during the mid-term, thereby offsetting the structural rise in cost that arises from the total investment of 11.2 billion Euros that have been invested in equipment and plant for the current and the next year.

The planned growth target includes an absolute rise in net assets and fixed costs. However, the CEO also stated that these structural changes will limit the aforementioned increases substantially. The precise impact of the company’s earnings on the program was not disclosed by the officials. The main rationale of the company at present is to better the competitive structure of the firm. It is anticipated that the “Next Stage” program will finally be implemented by 2020; a point of time by when Mercedes would (hopefully, as per company plans) have exceeded the performance of Audi and BMW. And as a result, Mercedes would become one of the best car manufacturers in the global automotive industry in terms of revenue, sales, and profitability.