Daimler AG, the maker of Mercedes-Benz luxury vehicles, is selling 15 car dealerships in eastern Germany to a unit of China’s Lei Shing Hong Group in a bid to lift profitability.
The sale of Mercedes outlets to Stern Auto GmbH, including showrooms in Leipzig, Dresden and Rostock, affects 1, 000 employees, the Stuttgart-based car manufacturer said in a statement. The Chinese company started operations in Germany last year by taking over a Mercedes-Benz dealership in Erfurt.
Daimler Chief Executive Officer Dieter Zetsche has vowed to increase operating profit at the Mercedes-Benz automotive division, including the Smart city-car nameplate, to 10 percent of sales to close a gap in profitability to larger luxury-auto competitors BMW AG and Audi AG. Zetsche has held off from setting a deadline for the goal since scrapping an already delayed target date in 2012. The margin was 8.3 percent in 2014.
Daimler outlined plans last year to eventually sell 56 of the 158 outlets that it owns in Germany to external investors. The disposals will affect about 3, 000 people out of a local auto-distribution workforce of 15, 000.