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Following Moderate Start To 2019, Daimler Reviewing Its All Costs

Following Moderate Start To 2019, Daimler Reviewing Its All Costs
Dissatisfaction about the profitability of German auto giant Daimler was expressed by the group’s outgoing chief executive as he informed that the luxury carmaker was reviewing its costs and expenses as it is also investing heavily in development of electric cars.
"Everything is under scrutiny: fixed and variable costs, material and personnel costs, investment projects, vertical integration and the product range," Dieter Zetsche said in a statement ahead of Daimler's annual general meeting in Berlin.
"Along with external factors, we are now also feeling the financial effects of the company's transformation," said Zetsche, who is set to be replaced by the 49-year-old Swede Ola Kaellenius.
Development costs for the new Mercedes-Benz cars would be cut by a significant amount by 2025 by the company, Kaellenius had said earlier this month. He also informed that the company plans to better its margins by way of making its alliances with its rivals more intensive. The details of the cost savings programs are being worked out by Kaellenius, he said.
Daimler plans to transform itself into a company that can boast of possessing a carbon neutral fleet by 2039 by its concentrated focus on the development of a range of electric and hybrid cars.
Plans for limiting the price of new car technologies for customers is being aimed by the Stuttgart-based group, Daimler said on Wednesday.
"To do so, we have to cut costs and increase efficiency throughout the company," Zetsche said. There has been a moderate start to the current year for Daimler while the company also confirmed its full-year targets, he said.
"This was expected, but it doesn't make it any better. In particular, we cannot and will not be satisfied with the current level of profitability," he said.
Following a standard two-year cooling off period, Zetsche would be made the chairman of the supervisory board of Daimler in 2021. He is a well known engineer who has been code named "Dr. Z" and he had joined the company way back in 1976.
The company has planned a new corporate structure that would combine the car and van businesses and the truck and bus businesses into just two new entities and the plans is set to be voted by the shareholders of Daimler soon. The company claimed that a greater degree of flexibility to list individual divisions would be available to the company because of the new corporate structure.

Christopher J. Mitchell

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