BMW has said it will not sell Mercedes-Benz finance car, which is a key part of its business model.
The German automaker said it would focus on its core financial services business and not sell the vehicle.
It also said it planned to invest in its own automotive brand, but that it would “continue to maintain a presence at the helm of its financial services operations”.
Mercedes-Benz Finance was launched by Mercedes in 2006 and the financial services division is the main vehicle for its finance operations.
It is now based in the US and is seen as a key platform for Mercedes’ plans to diversify into its own business.CEO Harald Krueger said the decision to focus on the finance business was “the right one”.
“Mercedes Finance has the capability to serve a wide range of customers, including some of the world’s largest pension funds and companies that are interested in investing in our financial services assets,” he said in a statement.
“Its financial services platform has been well received and we will continue to invest here in order to make it the most successful financial services company in the world.”‘
A new start for us’Mercedes has struggled for years to gain traction in the luxury car market.
Last year, it sold its largest luxury brand, Audi, to a group led by Volkswagen.
It then went into administration, with the sale to a private equity firm led by German billionaire Peter Arnett.
Mercedes had been in the spotlight for failing to meet its financial targets.
Last year, the German government fined it for not meeting its target to raise €200bn ($228bn) in total capital by 2021.
In the same year, its parent company, Daimler, also failed to meet the target.
It has also had to borrow large sums to fund its business.
Earlier this month, it unveiled plans to close its luxury business, the Mercedes-AMG brand, after years of decline.
It also said its investment arm would be sold to private equity group Cerberus, which has a stake in Cerberus.