Unlike Others, Mercedes-Benz Doesn't Need Government Money

Industry News / Comments

At least not for now.

As automakers across the globe order their factories to halt production in the wake of the COVID-19 outbreak, another vital factor has stopped: income. Because of new restrictions from governments for citizens to remain at home in order to help prevent the spread of the virus, it's nearly impossible to buy cars these days. It's not like Amazon will deliver a new car straight to your doorstep (yet). And without customers, automakers are being starved of cash. Unless alternative sources of revenue can be found or bank loans received, companies big and small are facing some turbulent times.

But there is at least one major automaker that's in solid financial health that doesn't require any outside or government assistance.

2019-2020 Mercedes-AMG GT 63 Burnout Mercedes-Benz
2019-2020 Mercedes-AMG GT 63 Rear Angle View Mercedes-Benz
2019-2020 Mercedes-AMG GT 63 Steering Wheel Controls Mercedes-Benz

Mercedes-Benz CEO Ola Kallenius told the German language Handelsblatt that his company is doing just fine, at least for now. "Daimler currently has no need for state aid. Generally speaking, the industry had a very good order intake before the crisis," he said.

This is why it's vital for companies to be debt-free or have manageable debt. But what about the company's suppliers? After all, they're equally affected by the novel coronavirus.

"We are in permanent discussions with our suppliers and consult them. Until now there has not been a case where liquidity was an issue," Kallenius added. Another vital factor currently working in Mercedes' favor is that it recently re-opened its factory in China and that demand has slowly but surely been increasing once again in the world's largest auto market.

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Front Angle View Mercedes-Benz
Sideward Vision Mercedes-Benz
Rear Angle View Mercedes-Benz
Dashboard Mercedes-Benz

"The vast majority of our dealerships have reopened, the customers are returning," Kallenius confirmed. "Every day more people come to the car dealerships. Demand is picking up, which makes us optimistic."

Both the Mercedes-Benz E-Class and C-Class sedans are manufactured in China specifically for that market. But for now, Mercedes' US and European operations remain idle.

2019-2020 Mercedes-Benz C-Class Sedan Side View Mercedes-Benz
2019-2020 Mercedes-Benz C-Class Sedan Rear Angle View Mercedes-Benz
2019-2020 Mercedes-Benz C-Class Sedan Dashboard Mercedes-Benz
2020 Mercedes-Benz AMG GT R Front View Driving Mercedes-Benz
Source Credits: Handelsblatt

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