BERLIN, May 22 — Daimler’s outgoing chief executive Dieter Zetsche today hammered home the need for the German car giant to reduce its costs to finance heavy investments in electric and autonomous cars.
“Everything is under scrutiny: fixed and variable costs, material and personnel costs, investment projects, vertical integration and the product range,” Zetsche told shareholders in Berlin before Ola Kallenius succeeds him.
The 49-year-old Swede, currently head of research, will take over as chief executive after 13 years of Zetsche’s leadership, marked by the divorce from Chrysler, the 2008 financial crisis and the “dieselgate” scandal.
“We cannot be satisfied with the current level of profitability,” added Zetsche, who plans to take a role on the supervisory board in two years’ time.
In addition to “external factors” such as the slowdown in the global automotive market, “the transformation of the company is leaving its mark financially” said the 66-year-old German.
The investment needed to electrify Mercedes cars, a crucial necessity to meet strict European regulations on CO2 emissions in the coming years, will cost the group dearly.
Daimler aims for a margin between eight per cent and 10 per cent by 2021 for its automotive division, after managing 7.8 per cent in 2018 and forecasting “between six and eight” per cent this year.
The Mercedes-Benz manufacturer has announced a savings program, the details of which should be presented in the coming months.
Shareholders will vote today on a major reorganisation of the group into a holding company topping three separate entities to give “more agility” to the manufacturer. — AFP
