German car and trucks maker, Daimler, has said it would seek to cut more than one billion euros in personnel costs from Mercedes-Benz Cars by 2022 as part of a sweeping overhaul.
Daimler shares were down 2.3 per cent in early trading at 52.17 euros, the biggest decline on Germany’s blue-chip index, which was down 0.3 per cent.
Management positions will be cut by around 10 per cent, and company said it would also seek more than 300 million euros from cutting personnel costs – plus another 250 million euros in fixed costs – at its trucks business.
Daimler said it needed to sell more electric vehicles to meet tougher European Union rules which force carmakers to cut carbon dioxide emissions from cars by 37.5 per cent by 2030 compared with 2021 levels, and following a 40 per cent cut between 2007 and 2021.
The company said it expected to achieve a return on sales from operating activities at Mercedes-Benz Cars & Vans of at least four per cent in 2020 and at least six per cent in 2022.
Mercedes-Benz expects car sales to grow by around three per cent in 2020, but said potential trade tariffs and Brexit could depress the return on sales by up to one per cent.
Earlier this year, Daimler had said it hoped to achieve a return on sales of three per cent to five per cent at Mercedes-Benz Cars.