"Mercedes warned of impending cost cuts and gave a gloomy outlook for 2025. The statement came after the company's profit fell by almost a third last year amid the crisis in China and slowing sales of electric cars.

Shares in the car giant fell more than 3% in Frankfurt after the results were announced, the latest bad news for Germany's crisis-hit auto sector, AFP reported.

In 2024, the manufacturer's net profit shrank 28% to 10.4 billion euros, while revenue also declined about 4% to 145.6 billion euros.

The group announced plans to cut production costs by 1/10 over the next two years and warned that 2025 would be another difficult year, with sales slowing further and profit margins deteriorating.

CEO Ola Kalenius insisted that "Mercedes is taking steps to make the company leaner, faster and stronger", in "an increasingly uncertain world".

Germany's automotive titans, long a pillar of the economy and among the country's major employers, are reeling from a delayed shift to electric vehicles, fierce competition from local rivals in China and weakening demand in other countries.

The flagging fortunes of the auto sector have become a symbol of a wider malaise affecting Europe's leading economy - a key battleground ahead of this weekend's general election.

The Stuttgart-based concern, which employs 166,000 people worldwide, did not immediately give details of the cost-cutting drive, such as potential job cuts. | BGNES