Mercedes-Benz has exponentially upped their production targets

Article by Christian A., on March 23, 2018

Mercedes-Benz’ mother company, Daimler, is very optimistic about the company’s performance. And it is pretty obvious because the company plans to increase production this year, assuming to boost their sales up to three million vehicles annually.

We can’t blame them though, because last year, the company sold approximately 2.4 million units. So if they could produce more vehicles yearly, then they will be able to deliver more too.

According to German weekly Automobilwoche, Markus Schaefer, the Daimler board member in charge of manufacturing and procurement at Mercedes-Benz said that the sites in their global production network are running high on usage rates. And this is mainly their reason for expanding their capabilities, also when basing it on market demand, that is already moving towards 3 million units.

To help out with their goal of selling 3 million units annually, Mercedes has to increase its model range up to 40 different options. Of course, part of this addition includes one of their most recent models that they revealed, that is the four-door coupe version of the AMG GT.

To be able to produce this much units, they will also open new production sites in different parts of the world like North America, Europe, and Asia. To be more specific, these plants will be set up in Aguascalientes, Mexico by the second half of this year, followed by another factory in Kecskemet, Hungary which should be ready by next year. And last would be the one located in Beijing, after the Hungarian plant is built.

All in all, Daimler invested as much as $3.7 billion. If things go as planned for them, meaning that if they sell 3 million vehicles yearly, then revenue is expected to offset the cost of new cars and new technologies. Earnings before interest and tax will likely be similar to those from last year, despite all the money the company has been shelling out.

Geely, a Chinese firm who recently bought shares (9.7 percent stake) from Daimler, probably helped with the funding of Daimler’s grand plan. Geely is keep to tap into Mercedes’ electric car knowledge to further own their EV ambitions. The Chinese firm’s investment here makes it the company’s largest shareholder, even when comparing it to Kuwait Investment Authority, which has 6.8 percent stake.

Right now, we wish Daimler and Mercedes-Benz all the luck when it comes to their ambitions. Hopefully, they could easily earn their investment back. Now that we have heard about Daimler’s plan, all we have to do is sit back and wait for more news about this topic, whether or not they will actually push through with building three plants, and if they could reach their goal of 3 million units sold annually.

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