Mercedes-Benz is shifting production of the S-Class and other luxury models at its Factory 56 in Sindelfingen, Germany, to a single shift starting this fall. This move comes amid a decline in sales for the high-end segment, impacting profitability.
The factory has operated in at least two shifts since it opened, however, the nearly 1,500 employees must prepare for cutbacks upon return from the August vacation period. Factory 56 is responsible for building the S-Class, EQS, Maybach, and AMG models.
Weakness in the luxury car market is reflected in Mercedes’ Q2 sales figures. Combined sales of the S-Class, EQS, EQS SUV, and GLS dropped nearly 25% year-over-year, from 44,200 to 33,400 units.
S-Class sales specifically saw a significant drop across key markets: 13% in China (10,430 units), 19% in the US (5,026 units), and a steeper 27% decrease in Europe (4,249 units) during the first half of 2024.
The production cut affects suppliers as well. An unnamed head of a major S-Class interior parts supplier called the reduction a “catastrophe”. A Mercedes dealer in Stuttgart hasn’t sold an S-Class since late 2023, while another has a barely used EQS demo car sitting on the lot for weeks, priced below €82,000 which is a significant discount from its usual price tag of over €130,000.
The shift to a single production line is unlikely to affect permanent employees at Sindelfingen, as they can be transferred to other production areas like Hall 46, where the E-Class and GLC are still built in three shifts. Temporary workers, however, might be laid off.
Source: Automotive News Europe