Mercedes-Benz’s third-quarter profits plummeted over 50% to R33 billion, down from R55 billion last year. Sales slipped 7% to R522 billion, with vehicle deliveries falling 3%. Luxury car sales dropped 12% worldwide.
According to Mercedes, the poor results stem from a “challenging market environment and fierce competition” in China. Chief Financial Officer Harald Wilhelm admitted the earnings didn’t meet expectations.
Germany’s auto giants are struggling in China, a crucial market, amid economic turbulence and growing competition from local carmakers. Mercedes predicts 2024 sales will be slightly lower than last year, with fourth-quarter sales matching third-quarter levels.
This is Mercedes’ second profit warning this quarter. The company forecasts operating profit “significantly below” last year’s level.
European carmakers face challenges, including high domestic costs, a bumpy transition to electric vehicles, and Chinese market hurdles. Brussels’ planned tariffs on Chinese electric car imports will further strain German automakers.
Mercedes’ struggles reflect the industry’s woes:
- Revenue: R522 billion (down 7%)
- Net profit: R33 billion (down 50%)
- Vehicle deliveries: -3%
- Luxury car sales: -12%