Daimler in search for the ever-higher earnings margin image

The parent company of the Mercedes-Benz brand is searching for new ways of continuously improving the profitability goal margins and is now thinking of shrinking its home country retail unit and stop making electric-car battery packs.

According to a statement from the Daimler works council, the third-largest producer of premium cars has come up with plans to sell 36 auto-sales outlets in Germany and, according to a report in Germany’s Manager Magazin, the automaker is also intent on closing the Li-Tec battery-cell factory in Kamenz, Germany, by 2016 – shifting the necessary supply to an outside parts supplier.

“We are working on the future positioning of Li-Tec,” said Hendrik Sackmann, a Daimler spokesman. “The battery business is growing rapidly, and everything is going according to plan at Li-Tec.”

While Daimler’s retail personnel is under a current agreement that sees jobs preserved until the end of 2017 and dealerships unable to be sold until the end of 2015, the bigger dealers can dispose of smaller individual sites, with the works council aiming to lower the administrative count by around 340 jobs and reorganize dealerships regionally.

The company has moved to consolidate only investments in the automotive and truck making units, while business outside the areas are being sold or closed – last year Daimler sold its stake in aviation company Airbus Group NV and this March agreed to the purchase of its 50% stake in an engine joint venture to Rolls-Royce, its partner.

Via Bloomberg