GRANADA, Spain (Reuters) - Germany's luxury auto maker Daimler
The cost cut effort will help Daimler reach an average annual return on sales of 10 percent for its Mercedes-Benz Cars division in the medium term, Zetsche said at a presentation of the Mercedes-Benz compact Sports utility vehicle, the GLA.
The rise in sales of lower-margin compact cars like the A-Class and B-Class vehicles make additional costs cuts necessary to ensure the Stuttgart-based auto maker can reach its profit goal, Zetsche said.
Separately, Zetsche reiterated the auto maker was on the lookout for a new factory to build small cars.
"We are thinking about an additional factory, which in all likelihood will not be in Germany," Zetsche said.
Last month Zetsche said the Germany-based auto maker may build another factory in North America as a way to ramp up global production capacity for compact cars.
(Reporting by Ilona Wissenach in Granada; writing by Edward Taylor, editing by William Hardy)