Mercedes-Benz plans substantial cost cuts

German automaker Mercedes-Benz said on Thursday that the company plans to cut costs following weakening business, reported dpa.

"In the coming years, we will reduce our costs by several billion euros a year," a Mercedes-Benz spokeswoman told dpa on Thursday.

She declined to say whether Mercedes-Benz is considering layoffs or specify where at the company the cost cuts would fall.

Germany's vaunted automotive industry has faced serious headwinds recently, amid struggles in the shift to electric vehicles and increasingly intense competition in the Chinese market, where German automakers once saw booming business.

Volkswagen, Europe's largest auto brand, has threatened potential plant closures and mass layoffs in Germany, and is reportedly demanding across-the-board pay cuts from workers in collective bargaining talks.

Mercedes-Benz is also impacted by the difficult situation in the industry and needs to adjust costs, the company spokeswoman said.

"The economic situation remains extremely volatile worldwide. Only by sustainably increasing efficiency will we remain financially strong and able to act," she said.

Significant savings - including in fixed costs - have put the company in a good starting position, she said.

"We are continuing along this path calmly but extremely consistently," she added.