Mercedes-Benz Board Freezes German Spending as Beijing's Luxury Slump Deepens
Published on 11/15/2026 at 12:51 | Editorial boerse-global.de
Mercedes-Benz has put every further investment at its German sites on hold, according to an internal memo cited by Reuters, after talks over labour costs broke down. The supervisory move, approved by the board on Thursday, opens the door to a closer examination of possible plant closures — a threat that has already drawn fire from workers and their representatives.
Berlin is watching, but keeping its distance. A spokesperson for the Federal Ministry for Economic Affairs said on Friday that the company must ultimately answer for its own decisions, per Reuters.
The standoff has been building. Management wants longer hours without extra pay and is weighing relocations as well as shutdowns, according to Handelsblatt. On Friday, employees and works councils attacked the plant debate and demanded firm commitments on jobs and site utilisation. The central works council and IG Metall pushed back against what they called yet another push on the competitiveness of German sites, with works council chairman Ergun Lümali pointing to the group's difficult position.
Should investors sell immediately? Or is it worth buying Mercedes-Benz?
China's Luxury Market Sits 30% Below Year-Earlier Levels
Pressure is coming from the other side of the world too. Speaking on Wednesday at the Automobilwoche congress, chief executive Ola Källenius said the decline in China's car market has been sharper than expected at the start of the year, and that Mercedes must rework its business model and systems there. The country's luxury segment, he said, is currently running 30% below last year's level.
Analysts are turning more cautious. Jefferies cut Mercedes-Benz to "Hold" from "Buy" on Tuesday and trimmed its price target to EUR 44 from EUR 46. The stock nevertheless added 0.3% on Friday, closing at EUR 40.67.
Green Targets Come With Strings Attached
Alongside the cost fight, the carmaker fleshed out its decarbonisation roadmap on Tuesday, detailing measures across its supply chain. These include a long-term offtake agreement with Hydro for primary aluminium and membership of the First Movers Coalition, with the company pledging to report its CO? reduction path more transparently.
The headline goals, all measured against a 2019 baseline and set for 2039, are a 90% cut in production emissions and a 70% reduction across the relevant value-creation stages. For the use phase, Mercedes is targeting an 80% decline — provided market conditions allow.
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