Daimler AG will seek to sell its factory located in Hambach, France, as part of an overhaul of its production system, the German automaker said on Friday, prompting France’s finance minister Bruno Le Maire to urge the company to reconsider.
The move comes as the auto industry deals with overcapacity and declining demand for new cars in Europe.
It will also lead Daimler to take a restructuring charge of hundreds of millions of euros in its second quarter, the company stated.
Daimler, which owns the Mercedes-Benz and Smart brands, had used the Hambach factory for producing electric and combustion-engined variants of its two-seater Smart vehicles, making over 80,000 cars in 2017.
But the production of the Smart will shift from France to China after Daimler stated in 2019 it would build its next generation of Smart electric cars through a joint venture with Geely.
“I hope that the future of this modern and exemplary site which has chosen the ecological transition, notably by producing electric vehicles, will be assured,” French finance minister Bruno Le Maire said.
“Daimler must keep all options open, including keeping the site,” he said.