Mercedes-Benz profit hit by "fierce competition" in China

Mercedes-Benz Group AG reported a decline in third-quarter earnings on Friday, facing challenging market conditions and heightened competition, especially in China.

Mercedes-Benz profit hit by "fierce competition" in China

The Stuttgart-based automaker posted a 54% drop in net profit for the third quarter of 2024, falling to EUR1.72 billion from EUR3.72 billion a year earlier. Revenue decreased by 6.7% to EUR34.53 billion from EUR37.00 billion. Earnings per share also dropped by 48%, reaching EUR1.81 from EUR3.44. “Mercedes-Benz Group AG achieved solid sales in the third quarter despite product transitions, a difficult market environment, and intense competition, particularly in China,” the company stated.

CFO comment

Chief Financial Officer Harald Wilhelm acknowledged that earnings were below expectations, stating, “The Q3 results do not meet our ambitions. However, Mercedes-Benz continues to generate solid cash flows, even in challenging conditions. We are cautiously monitoring market developments and will intensify efforts to improve efficiency and cut costs across the business.” In the Mercedes-Benz Cars segment—which includes luxury models like Maybach, the Mercedes me digital platform, and the Mercedes-AMG performance line—third-quarter revenue dropped 5.6% to EUR25.60 billion from EUR27.13 billion. Mercedes-Benz Vans revenue declined by 5.7% to EUR4.66 billion from EUR4.94 billion, while Mercedes-Benz Mobility revenue fell by 4.7% to EUR6.01 billion from EUR6.30 billion. The Mobility division provides financing, leasing, and insurance services. Last month, Mercedes-Benz downgraded its annual outlook, now expecting earnings before interest and tax (EBIT) to be "significantly below" the prior year’s level, revising its previous forecast of a result "slightly below" 2023. The company’s EBIT in 2023 had dropped 3.9% to EUR19.66 billion.