By Cristina Roca 
 

Mercedes-Benz AG said Friday that it is exploring the sale of its car assembly plant in Hambach, France as the coronavirus pandemic and its drive towards electric mobility push it to streamline its production network.

The Daimler AG-owned car maker said it will book a negative one-off in the mid three-digit million-euro range in the second quarter of the year from the devaluation of fixed assets. This shouldn't affect the company's industrial business free cash flow, but Mercedes-Benz warned "additional burdens may arise in the course of negotiations."

Mercedes-Benz said it needs to adjust its production capacity to current market conditions after the coronavirus pandemic's blow to the economy, and that the decision to start talks to sell the Hambach plant in the north-east of France comes against this backdrop. Around 1,600 employees work at the Hambach site.

The car maker also said it needs to become more efficient in light of its electrification and digitalization drive, which requires significant investments.

 

Write to Cristina Roca at cristina.roca@dowjones.com; @_cristinaroca

 

(END) Dow Jones Newswires

July 03, 2020 09:36 ET (13:36 GMT)

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