Daimler Plans to Cut IT Spending by 150M Euro Annually image

Daimler technology chief Wilfried Porth said that the automaker plans to cut costs on IT services by 150 million euro annually by the end of 2016.

As Daimler struggles to reach its rivals when it comes to efficiency and scale in smaller cars and their success in China, the automaker has also lost ground to its German peers, VW and BMW. Therefore Daimler decided to reduce Mercedes-Benz annual costs by 2 billion euro by the end of 2014 and plans to make most of the cuts by the end of this year.

Porth said that Daimler will take back its IT systems outsourced to SAP in order to reach its target. The German weekly Focus published a report according to which Mercedes-Benz plants in Germany are less efficient compared with the facilities in other markets.

Last month an anonymous source said that Daimler will sell some of its Mercedes-Benz dealerships located in Germany to be able to cut costs and close a profitability gap with Audi and BMW. While BMW and Audi rely on franchises led by private entrepreneurs to sell their vehicles, Mercedes depends on its unprofitable dealerships owned by the company.

Source: Yahoo Finance