Mercedes-Benz $MBG (-1,56%) has made an important decision: The company will reduce the number of vehicles produced in Germany while doubling capacity in countries with lower costs. However, these restructuring measures are not without consequences, as job cuts will be necessary. Fortunately, the intention remains to keep all plants in Germany open. The CFO has emphasized that these job cuts will be made through voluntary redundancies and natural attrition, giving employees some control over their situation. For the current year, the company is expecting a decline in turnover and a lower dividend. In addition, the operating return in the core business with premium cars has fallen. In order to remain competitive, Mercedes-Benz plans to reduce production costs by 10 percent by 2027. Of particular note is the relocation of production to Hungary, where costs are an impressive 70 percent lower. This could help the company to hold its own in an increasingly competitive market.
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