Daimler plans to cut administration costs by 20 percent, report says

Incoming Daimler CEO Ola Kallenius is working on a cost-reduction program to reach profit margin targets that are threatened by global trade woes and ramp up issues at factories, a German business paper reported.

Kallenius has been working for months on a cost-cutting initiative called “Move,” which is expected to be ready in the summer, Handelsblatt reported, citing company sources, Automotive News reads.

Central administration costs are to be cut by about 20 ercent, the paper said. Billions of euros in efficiency potential would be targeted, Handelsblatt said. Daimler declined to comment.

Kallenius said earlier this month that Daimler will cut development costs of new Mercedes-Benz cars by a significant amount by 2025 and will intensify alliances with rivals as a way to improve margins. Daimler has struck alliances with Renault, Nissan and BMW to share development and procurement costs of trucks, buses and passenger cars.

Kallenius will take over from Dieter Zetsche after the automaker’s annual general meeting on May 22.