Mercedes-Benz to Offer Voluntary Buyouts for Support Staff as Market Worsens — Update

By Dominic Chopping

Mercedes-Benz said it would offer a new voluntary buyout program for support staff, as it pushes ahead with plans to become more efficient in the face of deteriorating market conditions.

The German luxury-car maker had cut its expectations for the year on Tuesday, warning of a worsening market in China and higher costs in the fourth quarter, including for raw materials. It now expects an adjusted return on sales this year of 2% to 3% in its cars unit, while earnings before interest and tax are expected to land at the prior-year level of 5.82 billion euros ($6.47 billion).

"Market conditions have become even more challenging over the course of the year, particularly in China," Chief Executive Officer Ola Kallenius said Wednesday.

"With more product launches ahead and AI changing the way we work, we are focused on building a faster, more efficient and even more competitive Mercedes-Benz."

Western automakers are contending with intense competition in China, which has seen many manufacturers engage in a prolonged price war to entice customers.

Mercedes said a consistent focus on costs and strong contributions from its vans and financial services businesses have helped counter these headwinds.

The carmaker expects to benefit from the launch of more than 40 new models between 2025 and 2027 as well as its recent efforts to further intensify global productivity measures that focus on its German sites.

Under these measures, it said Wednesday that it would again offer its voluntary severance program for "indirect functions" in Germany starting in December.

Last year, the company outlined plans to become more efficient through a series of measures that include job cuts and shifting some production from its German home to lower-cost countries such as Hungary. It is also working to lower energy costs, increase automation and decrease logistics expenses to cut the production cost of each vehicle.

As part of these efforts, Mercedes said it is using artificial intelligence to increase speed, productivity and efficiency across all functions, including research and development, production, sales and administration.

The company said it is seeing "clear momentum" from its new model portfolio, with customer demand for the new electric portfolio remaining strong and order books for key models in Europe extending well into 2027.

Mercedes had prereleased third-quarter EBIT of 1.77 billion euros, up from 750 million euros a year prior, and an adjusted return on sales for its cars business of 2.5%, down from 4.8%.

Revenue declined 4.5% to 30.7 billion euros.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

October 28, 2026 03:24 ET (07:24 GMT)