Daimler AG is eliminating 1,500 jobs at its Brazilian truckmaking division as demand for commercial vehicles in the country shows no sign of recovery.
Cutting about 13 percent of its workforce in Brazil became inevitable after industrywide truck sales in South America’s largest economy plunged 44 percent in the first half of 2015, compounding a drop last year, said Florian Martens, a spokesman at Stuttgart, Germany-based Daimler.
The German manufacturer’s reaction to Brazil’s shrinking economy, which is forecast to continue contracting until at least 2016, underscores the concerns sparking a deepening global stock selloff that spread from emerging markets. Daimler shares dropped as much as 5.4 percent in Frankfurt on Monday.
Brazil’s recession, high levels of inflation and rising financing costs are discouraging customers from buying vehicles, Martens said.
“For many months now there’s simply been a dramatic decline in truck orders,” he said. “Unfortunately, we don’t expect a quick recovery of the market.”
While Daimler has been unable to escape Brazil’s woes, the German automaker is faring better in China, where demand is also slowing. The manufacturer of Mercedes-Benz vehicles is “still confident” of reaching a goal of selling more than 300,000 cars in China this year, despite the stock market plunge, Daimler’s China chief Hubertus Troska said at briefing on Monday in Beijing.
The company operates two plants in Brazil that build trucks and buses. Its workforce in the Latin American country totaled about 12,000 employees at the end of last year. Daimler is also developing a factory in Brazil to make passenger cars starting in 2016.