Mercedes-Benz AG intends to streamline its global production network

Jul 3, 2020   OEM

Mercedes-Benz AG is on the road to the CO₂-neutral mobility of the future and will heavily invest in the transformation of the company in the coming years. The company is focusing on the electrification of its product range, as well as the digitalisation of vehicles and company processes.

At the same time, the company has taken numerous measures to sustainably improve its cost structure and become significantly more efficient. An important lever for this is the adjustment and realignment of capacity within its global production network. Against this backdrop, the company intends to start talks on the sale of its car assembly plant in Hambach, France.

 

Ola Källenius, Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG, said: “We continue to drive the transformation of our company and our products forward with all due speed. In light of future high investments, especially in electrification and digitalisation, we are consistently implementing measures to increase efficiency. This affects all areas of the company worldwide. In addition, the effects of the COVID 19 pandemic on the economy are creating new framework conditions in the market and in this context we are optimising our global production network. That is why we intend to start talks on the sale of the Hambach plant.”

 

Associated valuation effects of fixed assets will lead to a negative one-off effect from restructuring measures in the middle three-digit million amount in the second quarter at Mercedes-Benz AG. Furthermore, the company does not expect the devaluation to have any impact on the Free Cash Flow of its industrial business. Additional burdens may arise in the course of negotiations.

 

Markus Schäfer, Member of the Board of Management of Daimler AG and Mercedes-Benz AG; responsible for Daimler Group Research and Mercedes-Benz Cars COO, said: “The transformation to the CO₂-neutral mobility of the future also requires changes in our global production network. In this phase of economic challenge, we are balancing demand and capacity and we are now adjusting our production network. These changes also affect the Hambach plant. An important goal for us is to secure the future of the location. Another condition: The current smart models will continue to be produced in Hambach.”

 

The next generation of smart electric vehicles will be produced by the joint venture smart Automobile Co., Ltd. in China. This is a joint venture of Mercedes-Benz AG and the Zhejiang Geely Group (Geely Holding).

 

The Hambach plant launched operations on October 27, 1997. The plant has been producing the fourth generation of smart electric vehicles with the smart EQ fortwo and the smart EQ fortwo Cabrio since 2019. To date, more than 2.2 million smart fortwo have rolled off the assembly line in Hambach. Currently around 1,600 employees are working on the Hambach site.

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