Mercedes-Benz’s quarterly profit fell by more than 50 percent amid Chinese market troubles.

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By: AFP
, updated on: October 25, 2024, 15:16 pm

Struggling with higher costs and competition, Mercedes-Benz reported a 50 percent drop in third-quarter profits, due to a weak China.

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  • Struggling with higher costs and competition, Mercedes-Benz reported a 50 percent drop in third-quarter profits, which it attributed to the weak Chinese market.

mercedes-benz sales
Mercedes-Benz reported on Friday that its Q3 profits fell by more than 50 percent due to poor performance in the Chinese auto market. (Bloomberg)

German luxury carmaker Mercedes-Benz said on Friday its third-quarter profit fell more than 50 percent due to weakness in the key Chinese market.

The group said net profit stood at 1.72 billion euros ($1.86 billion), down from 3.7 billion euros a year earlier, while sales fell nearly seven percent to 34.5 billion euros.

Vehicle deliveries declined three percent, while China declined 13 percent. Worldwide sales of its most profitable luxury cars fell 12 percent.

The auto maker said the poor results were due to a “challenging market environment and fierce competition, particularly in China.”

Mercedes Chief Financial Officer Harald Wilhelm admitted that the earnings “did not meet our ambitions”.

Germany’s auto titans are struggling in China, one of their most important markets, as the world’s second-largest economy grapples with a period of turmoil and growing competition from domestic carmakers.

Mercedes said it expects annual sales in 2024 to be slightly lower than last year, and the fourth quarter is expected to be similar to the third quarter.

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The carmaker has already cut its annual outlook for the third quarter twice and is forecasting operating profit “well below prior year levels.”

Carmakers across Europe are suffering from high costs at home, a faltering shift toward electric vehicles and challenges in China, a key source of growth for many years.

Brussels is also set to impose higher tariffs on imports of electric cars from China, which is particularly a headache for German automakers who have invested heavily there and fear retaliation.

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First publication date: 25 October 2024, 15:16 PM IST

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