BERLIN (Reuters) – Daimler’s outgoing chief executive said on Wednesday that all of the luxury carmaker’s costs were under review as he expressed dissatisfaction with the group’s profitability as it invests heavily in electric cars.
Daimler AG CEO Dieter Zetsche poses ahead of the Daimler annual shareholder meeting in Berlin, Germany, May 22, 2019. REUTERS/Hannibal Hanschke
“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 bit.ly/2JWOCn2 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 hand control to 49-year-old Swede Ola Kaellenius on Wednesday.
Kaellenius said earlier this month that Daimler will cut development costs for new Mercedes-Benz cars by a significant amount by 2025 and will intensify alliances with rivals as a way to improve margins.
Kaellenius is working out details of the cost savings program.
Daimler is pushing to develop a raft of electric and hybrid cars so it can boast a carbon neutral car fleet by 2039.
The Stuttgart-based group said on Wednesday that it was aiming to limit the price of new car technologies for customers.
“To do so, we have to cut costs and increase efficiency throughout the company,” Zetsche said.
He said Daimler, which confirmed its full-year targets, had a moderate start to the year.
“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.”
Zetsche, an engineer nicknamed “Dr. Z” who joined the company in 1976, is due to become chairman of the supervisory board in 2021, following a standard two-year cooling off period.
Daimler’s shareholders are also set to approve a new corporate structure to combine the car and van businesses as well as the truck and bus businesses in two independent entities.
The new corporate structure would allow the carmaker greater flexibility to list individual divisions.
Reporting by Ilona Wissenbach and Thomas Seythal; Editing by Michelle Martin