Daimler has revealed it will stop production of Mercedes-Benz sedans in the United States and Mexico as it looks to cut costs and streamline production.
The German automaker made the announcement when revealing that it is shaping up to post an operating loss of €1.68 billion ($1.91 billion) in the second quarter. In addition, it has been revealed that a decline in demand triggered by dealership closures and lockdowns have seen Daimler report a second-quarter loss of €708 million ($806 million), before interest and taxes.
Daimler stopping U.S. and Mexican production of Mercedes-Benz sedans means the A-Class currently built at its factory in Aguascalientes, Mexico will no longer be built. This facility will instead concentrate on building the GLB.
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Furthermore, production of the Mercedes-Benz C-Class at the carmaker’s factory in Tuscaloosa, Alabama will cease, with the site to focus solely on SUVs. Reports have been swirling since at least 2017 that the C-Class’s future at the Alabama site has been under threat. No announcement was made about when production of the A-Class and C-Class will end in Mexico and U.S., respectively.
In what proved to be a difficult quarter, the Mercedes-Benz Cars & Vans unit posted an operating loss of €1.13 billion ($1.27 billion) and an adjusted operating loss of €284 million ($323 million). Daimler has added that it spent €129 million ($146 million) on restricting efforts throughout the quarter, including staff buyouts at Mercedes-Benz, Reuters reports.
Daimler also incurred €687 million ($782 million) in restricting costs to retool its global production network of factories producing Mercedes-Benz passenger cars.
