Mexico is bracing for the worst as a well-known car brand begins to close its doors in the American territory, sending shockwaves through the country. This announcement marks the end of months of speculation about the future of the iconic German automaker in America. The news has significant implications for Mexico, and it’s essential to understand the reasons behind this decision.
Thus, the story of this car brand in Mexico has come to an end. In Latin America, the automotive industry is experiencing rapid growth, but it’s also facing numerous challenges. The departure of this mythical car brand from the southern region is a significant blow to the industry. After almost a year of rumors, the reality has finally set in, and the brand has sold its plant in Argentina, leaving the country.
The Mercedes-Benz brand, with its CEO Ola Kaellenius, announced the sale of the Argentine plant and the end of commercial operations in the country through a conference. This news is unfortunate for the region’s automotive industry, which has been a significant player in the country for over 70 years. The plant, located in Virrey del Pino, La Matanza, was responsible for the production of Mercedes-Benz vehicles. However, the plant will not be closed entirely, as it will be taken over by new administrators.
In 2021, Mercedes-Benz was divided into two independent companies: Mercedes-Benz Group Ag and Daimler Truck Group. One of the companies is responsible for the production of the Sprinter and the commercialization of premium vehicles, while the other is dedicated to the manufacture of trucks and buses. As a result, heavy vehicles will continue to be manufactured in Argentina at a new plant being built in Zárate.
So, what awaits the brand and workers of the Argentine plant? Although the plant was sold, the company has stated that the decision was made as part of a global adjustment strategy to “adjust the size of the industrial base.” The plant will continue to operate under new direction, and the Daimler Truck Group will remain in control of the German parent company. This means that the heavy vehicle company will announce new products and steps to follow for workers.
The transfer of the plant to the new company, Prestige Auto – Open Cars SA, is currently being analyzed to protect the sources of work and develop new investments. The Sprinter will continue to be produced in Argentina until 2030, after which new projects will be announced.
The reasons behind Mercedes-Benz’s decision to leave Argentina, and potentially Mexico, are complex. The Latin market is a growth bridge for many companies, but due to global strategies, things have changed. Mercedes-Benz’s decision reflects a shift in its world strategy, prioritizing investments in more stable markets to adapt to the transition to electrical mobility.
This escape from Argentina does not leave the rest of Latin America exempt from the possibility of retirement. For example, in Mexico, the German brand confirmed that production of the GLB model will end by 2026 at the Aguascalientes plant. As part of a reorganization of resources and cost reduction, Harald Wilhelm, director of Finance and Control and member of the Mercedes-Benz Group Board of Directors, ratified the decision to reduce 200,000 units of the manufactured truck in Mexico.
The idea is to focus on markets in Europe, strengthen the German plant and the one in Hungary, and explore the Asian market. However, Mercedes-Benz has faced difficulties in China, where it has struggled to sell its electric cars. The German brand admitted that the GLB did not have the expected acceptance, and therefore, contingency plans were implemented, gradually reducing the units assembled in Aguascalientes. The crisis will continue, and it’s essential to monitor the situation, especially with the added pressure of Trump’s tariffs.