Mercedes To Phase Out Manuals And Cut Down Engine Options In Cost-Cutting Push

Mercedes has announced more details about its major cost-cutting strategy in order to achieve higher profitability and lower its break-even point.

The German carmaker will gradually phase out manual transmissions and reduce the number of internal combustion engines by 40 percent until 2025 and by 70 percent by 2030. The target is to cut fixed costs and R&D expenditure by more than 20 percent by 2025.

“While we will expand the electrified portfolio towards a share of more than 50 percent of global sales by 2030, our investments in combustion engine development will decline quickly and the number of combustion engine variants will fall by 70 percent by 2030”, said Markus Schaefer, Mercedes-Benz’s Chief Operating Officer.

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Mercedes was never a brand associated with the manual transmission anyway, offering very few models with three pedals, usually at their entry-level variants in regions like Europe. The company’s current US lineup does not include any model fitted with a manual transmission, so the news is not surprising.

The German carmaker will also develop its own MB.OS proprietary operating system, which will arrive in the market in 2024, in-house. The new operating system that will centralize the control of all the vehicles’ domains and customer interfaces is going to be designed around scalable architectures and will allow greater speeds and more frequent updates.

Mercedes stopped short of commenting on which models will be affected first or when these measures will start taking place. However, the carmaker’s CEO Ola Kallenius said to analysts that compact models like the A- and B-Class will not be the brand’s main priority, according to AutoNews.