Amid Losses, Daimler Rethinks North American-made Sedans
Domestic automakers have largely rid their North American facilities of sedans, so why shouldn’t foreign manufacturers? That’s what Mercedes-Benz parent Daimler plans to do after announcing a second-quarter loss of $1.9 billion.
While the quarterly loss was less than analysts expected, financial and sales pressures brought on by the coronavirus pandemic has led the automaker to cull car production on this side of the pond.
“Our systematic efforts to lower the breakeven of the company by reducing costs and adjusting capacity will need to continue,” CEO Ola Kaellenius said, per Reuters.
In terms of production, that means a number of things. The company has already decided to ditch a French assembly plant that once cranked out Smart models for North American consumers, but can now be replaced by a Chinese facility (after Geely’s purchase of a 50-percent stake in the brand). In North America, the plan is to get the Mercedes-Benz C-Class out of Alabama.
The automaker’s best-selling car in the U.S., the C-Class entered production in Vance, Alabama in 2014, though it was rumored last year that future generations of the model would hail from elsewhere. The plant focuses mainly on the GLS and GLE utility vehicles, and that’s where M-B sees future growth.
South of the border, the company’s plant in Aguascalientes, Mexico (that’s the joint Renault-Nissan one) will cease production of “a variant” of the A-Class, Reuters reports, turning its attention to the new Mercedes-Benz GLB small crossover. The A-Class sedan entered production at the plant in September 2018.[Image: Daimler]
Old_WRX on Jul 21, 2020
@Lou_BC, "It makes perfect sense that you want to exit this discussion. Being forced to reassess one’s position is never easy" So, I should reassess my opinion based on this discussion? Hmmm, no. Once, you've looked behind the curtain you can't go back to believing in the wizard.
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- Arthur Dailey "Check out the used car market." Late model, low mileage vehicles are in many instance selling for more than you would pay if you put a deposit on a new vehicle. The reason? Supply and demand. You can take the used vehicle home now. Whereas you might have to wait up to 24 months for your new vehicle.
- VoGhost Matt, you say 'overpriced', but don't you mean 'underpriced'? It's when a manufacturer underprices, that dealers add their markup. If they were overpriced, the dealers would discount.
- Bobbysirhan I'm surprised by the particular Porsches to make the list, and also by the Cadillac. Most of all, I'm shocked that the 2-door Mini Cooper is on here. I didn't even know they still made them, let alone that anyone was still buying them.
- Ajla I assume the CT5 is on the list due to the Blackwing variant.It would be interesting to take the incentives that existed in October 2019 and include that in an analysis like this as well. The thing about the used market is that while you'll pay less in total dollars, in some cases the percentage increase from 2019 is even worse than with new cars. Buying a Saturn Relay for $6k isn't exactly a winning move.
- VoGhost Reminder: dealers exist to line the pockets of millionaires who contribute to local politicians.