Mercedes-Benz is set to reduce its office-related costs in China by 25% by 2027, with plans to cut 10-15% of sales and finance jobs, reported Reuters.

Notably, the company’s 2,000 employees in research and development at Mercedes-Benz China will remain unaffected by these layoffs, an anonymous source told the news agency.

The German luxury carmaker, facing intense competition from domestic rivals, is focusing on maintaining its market share in the country. It is also implementing cost-cutting measures globally and recently warned that its 2025 earnings are expected to decline significantly.

However, the company is still planning significant investments in China to maintain and expand its market position amid rising competition from electric vehicle (EV) manufacturers.

Mercedes-Benz is also looking to partner with local suppliers to enhance its product competitiveness.

According to Reuters, a spokesperson noted that the cost-cutting targets could be adjusted based on market conditions.

Meanwhile, Mercedes-Benz CFO Harald Wilhelm has told investors that the company's BBAC joint venture with BAIC Motors is aiming to lower material costs by more than 10% and production costs by over 20%.

Wilhelm emphasised the cost-cutting initiative aims to "rightsize" operations to maintain profitability.

Additionally, Wilhelm said that Mercedes-Benz plans to increase local production in China and the US to mitigate the impact of rising trade tensions.

Last month, it was reported that Mercedes-Benz was considering the sale of its car-leasing unit Athlon as part of a broader operational review.

Although potential buyers have been approached, the discussions are preliminary and may not result in a sale.