Mercedes-Benz Tightens Belt as Profits Fall by Half

Mercedes-Benz is going all-in on cost cuts after seeing its profits drop significantly, with the blame mostly on weak demand in China. The German luxury carmaker kicked off a cost-cutting mission after its net profit went from $4 billion to $1. 9 billion in the third quarter. That's a dramatic cut from 12. 4% to 4. 7% in profit margin. The company reports that car sales are slumping across Europe, but China is the real concern. A weak economy and uncertain property market have made Chinese buyers cautious, leading to a sharp decline in luxury car purchases. Mercedes-Benz shares took a hit too, dropping 1. 2% after the news.

Chief Financial Officer Harald Wilhelm said they're not meeting their targets but are still generating cash. The next step is to cut back on costs even more, including materials for cars, factory use, and labor. This isn't the first time they've tried this; they've been reducing costs over the past five years, but now it's time to get even tougher. European automakers are facing serious competition in China and are worried about trade tensions. Higher tariffs on imported vehicles could make things even worse for them. Mercedes-Benz has urged the European Commission to delay any tariff hikes so they can work on a deal. “We're looking at the future with care, ” Wilhelm said. “We'll do what it takes to boost our efficiency and save costs across our business. ”

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