4/18/2019 | 1 MINUTE READ

Report: Daimler Targets $9 Billion in Cost Cuts by 2021

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Daimler AG aims to achieve €8 billion ($9 billion) in combined cost savings from its passenger car and commercial truck operations by 2021, sources tell Manager Magazin.

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Daimler AG aims to achieve 8 billion ($9 billion) in combined cost savings from its passenger car ($6.75 billion) and commercial truck ($2.25 billion) operations by 2021, sources tell Manager Magazin.

The initiative is being pushed by incoming CEO Ola Kallenius, according to the report. Kallenius, who currently heads research and product development for Mercedes-Benz, is due to succeed Dieter Zetsche next month.

Daimler declined to comment. But the carmaker pledged to reduce costs after its net profit fell 28% in 2018. The profit decline was attributed to global trade issues, the European Union’s new emission test protocol and high development costs for new technologies.

In addition, production problems at the company’s Mercedes-Benz plant in Tuscaloosa, Ala., are expected to negatively impact first quarter results, which will be announced next week. The facility produced about 30,000 vehicles with faulty electronics systems that had to be extensively reworked, according to Manager Magazin.

The German magazine also says Kaellenius has decided not to renew Daimler’s technical relationship with the Renault-Nissan alliance. This would contradict reports in December that Mitsubishi, which joined the Renault-Nissan alliance in 2016, also would cooperate with Daimler. Under the Renault-Nissan/Daimler partnership, which was formed in 2010, the companies have shared select platforms and engines.