Mercedes-Benz Faces Impacts and Reduces Truck Production to One Shift in São Bernardo do Campo

High Interest Rates And Difficulties In Granting Loans Lead Mercedes To Take Measures

At the beginning of the year, Mercedes-Benz already anticipated a decline in the commercial vehicle market for 2023 as a result of the introduction of Euro 6 – a system defined as a set of rules regulating pollutant emissions for diesel engines – which mainly affects truck production.

Throughout this 1st quarter, due to high interest rates and difficulties in granting loans, the German automaker observed a demand much lower than initially expected. In this way, Mercedes faces several negative impacts such as overproduction, high inventories, surplus personnel, and increased fixed costs.

The results and performance for the first three months of 2023 have not yet been disclosed. However, Marcello Larussa, the company’s commercial director, assured that performance improved both compared to the initial quarter of 2022 and in relation to the final number for the year.

Production Cut With Partial Collective Vacation

In a news bulletin, Mercedes-Benz announces that stock levels need to be reduced, as well as the volume of production planned for the year 2023, adjusted for lower market demand. The surplus personnel throughout the year, due to the reduction in production volumes, also needs to be addressed.

From this perspective, the company implemented part of the production cut with partial collective vacation in April. In addition, short work weeks are scheduled for this same month. However, other measures still need to be adopted.

It is important to remember that Mercedes-Benz Trucks and Buses announced a restructuring of its truck and bus chassis factory in São Bernardo do Campo (SP), which would result in the dismissal of 3,600 workers and the outsourcing of part of the operation. This measure, announced in September of last year, was attributed to cost pressures and the transformation of the automotive industry.

Adoption Of A Single Shift In The Truck Factory

Among the measures that Mercedes-Benz still wishes to implement to contain overproduction and high inventories is the adoption of a single work shift in the truck factory for a period of 2 to 3 months.

In order for the change to take place, the German automaker discussed the need for adopting the single shift in truck production starting in May with the Union last week. Thus, the company expects permission to implement this measure and also wants to find more viable solutions for the remainder of the year.