Production of Mercedes C-Class sedans in the United States nears completion

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Mercedes-Benz just launched the new AMG GT Black Series this week, further strengthening the brand’s hold in the high-powered coupe segment. While all of this is going on, Mercedes parent company Daimler is facing a financial problem. The German company is reported to have suffered a second-quarter operating loss of 1.68 billion euros ($ 1.91 billion) due to the dreaded coronavirus pandemic.This prompted the company to cut back on production and we all know which segment is going to be affected. With SUVs emerging as primary cash cows for Stuttgart, production of Mercedes sedans faces a halt – at least for North America.

According to a report by Reuters, Mercedes is seeking to stop production of the C-Class sedan Tuscaloosa, Alabama. In addition, the automaker will also stop manufacturing the A-Class in Aguascalientes, Mexico. Both factories will continue to make more profitable SUVs.

“Our systematic efforts to lower the company’s break-even point by reducing costs and adjusting capacity will need to continue,” said Ola Kaellenius, CEO of Mercedes-Benz, in a statement. Reuters report.

Weak demand for cars during the pandemic is not the only adversity Daimler has faced. It spent 129 million euros ($ 147 million) on buyouts and early retirement, as well as 687 million euros ($ 785 million) to restructure its global production of Mercedes vehicles.

In addition, Daimler also plans to save 2 billion euros per year through staff reductions, which equates to 20,000 jobs, according to Handelsblatt, a German newspaper. The company is also considering selling its Iracemapolis, Brazil plant, while an extension of the Kekskemet, Hungary plant is more likely to encounter a roadblock.

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