Mercedes cuts SUV production (U.S)

More evidence of global economic downturn has come with Mercedes-Benz’s announcement that it intends to slash production over the next four months.

40,000 units of previously-planned production will be lost, with cuts taking place on both sides of the Atlantic. The Alabama plant that builds the ML and GL SUVs faces the brunt of cutbacks after American SUV sales were hit by economic uncertainty and the rising oil price.

Mercedes bosses will be more alarmed by a sharp decline in sales of its most profitable model, the previously rock-solid S-Class. According to the company insiders, the ‘S’ is down by 23% year-on-year in America.

Full-blown recession in the U.S would cause serious distress to all the established premium car makers, as it is the biggest market for almost all luxury models. Mercedes is responding to the decline in sales by considering taking smaller models to the ‘States, including the next-generation A-Class and B-Class compact hatchbacks.