Daimler who owns Mercedes Benz has reported financial losses of 64% in the 2019 net profit, this is the largest drop in profit in over a decade. These figures come in, even with record breaking Mercedes Benz sales. CEO Ola Kaellenius signed off over 5 billion euros (£4.2 billion) in restructuring and legal costs.

The shares prices of the German automotive manufacturer rose 2% after the preliminary figures were released in January 2020.

Data has shown Mercedes Benz, is still the worlds top selling luxury automaker. However, the net profit fell from 7.6 billion Euros to 2.7 billion.

Large costs have been associated with Mercedes deciding to drop its X-class pick-up, and also restructuring its mobility unit last year. Costs incurred for these two actions were around 828 million and 405 million euros, respectively.

How will Daimler claw the losses back

Daimler has said it will be assessing its global workforce, with an aim to save more than 1 billion Euros. In November Daimler said it will be cutting around 10,000 jobs worldwide by 2022 – focusing on management roles.

Daimler are not alone in problems such as these, with other car makers around the world struggling with the costs associated with research for electric cars.  Due to the transitioning from the internal combustion engine to the electric car.

Daimler has incurred legal costs of 5.4 billion in 2019, to include the dieselgate costs. Also in September 2019 German prosecutors fined Daimler 870 million Euros, this was for failing to comply with emission regulations. It also has pending court actions against it in Germany and in the U.S, as well as lawsuits from customers.

The vans division saw a 3.1 billion Euros loss in profit.

Ola Källenius, chairman of Daimler’s management board, said Daimler “cannot be satisfied with our bottom line”.

He said also that Daimler “substantially ramped up our investments into new technologies”, and that “measures to cut costs and to increase cash flows are necessary”.

The carmaker which employs over 299,000 people over the world, said it increased its research involved in electric moto vehicles by more than 500 million Euros in 2019, but has still not launched an electric mainstream vehicle.

The company saw flat sales for the year, at 3.35 million vehicles. Revenues grew by 3% year-on-year to reach 172 billion Euros.