The company is reviewing its commercial vehicle range as diesel's image problems have severely hurt sales.
The product line of the Mercedes-Benz van division, including the X-Class ute, is currently under review due to changing market conditions.
Marcus Breitschwerdt, head of Mercedes-Benz Vans, told Reuters management was busy "reviewing and realigning our strategic orientation" with a downturn in diesel sales hitting the division hard.
Speaking at the launch of the EQV electric people mover, Breitschwerdt said sales of the Nissan Navara-based X-Class were not up to the company's expectations.
Describing the X-Class as a "niche product" he also ruled out interest in developing a pickup truck similar in size to the Ford F-150, Chevrolet Silverado or Ram 1500.
Last month sources told Automotive News Mercedes-Benz management was considering axing the ute.
Although it is a ute, the X-Class is a product of Daimler's van division. Globally the company only sold around 16,000 X-Class utes in 2018.
So far this year the company has sold 1201 X-Class utes in Australia, well behind the class leading Toyota Hilux (29,491), as well as its fellow European, the Volkswagen Amarok (4885).
The cuts at Mercedes-Benz Vans could go beyond the dropping drivetrains, variants or entire model lines with Breitschwerdt stating the division had too many layers of management. The division currently employs around 26,000 people.
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