Mercedes-Benz Group Sees Q3 Sales Decline Amid Weak Demand in China

Mercedes-Benz Group has reported a decline in third-quarter sales, impacted by challenging economic conditions in China and a sluggish market for battery-powered electric vehicles (EVs).

During this period, total sales, which include both passenger cars and vans, fell by 3% compared to the previous year, totaling 594,600 units. This also marked a 1% decrease from the previous quarter. Sales of battery EVs experienced a significant drop, down 31% from a year prior, amounting to 46,900 units.

The company stated that “softer demand, mainly in Asia, affected overall sales.”

In China, the world’s largest automotive market, sales were recorded at 170,700, reflecting a 13% decline. The van division of Mercedes-Benz also “faced a softening environment” in the country during the third quarter.

Mercedes-Benz, along with competitors such as Volkswagen and BMW, has already adjusted their annual performance forecasts downward due to the sluggishness in China.

In September, Mercedes-Benz lowered its guidance for the second time in three months, now expecting annual group earnings before interest and taxes to fall significantly below last year’s figure of 19.7 billion euros, having previously anticipated only a slight decline.

Current estimates for group core earnings stand at 15.83 billion euros according to recent analysis.

Projected adjusted returns on sales for Mercedes-Benz’s passenger cars are now anticipated to range between 7.5% to 8.5% in 2024, down from an earlier estimate of 10% to 11%. This suggests an expected adjusted return of approximately 6% in the latter half of 2024.

CEO Ola Kaellenius expressed uncertainty regarding the duration of the underperformance in China, cautioning investors that he remains “cautious for the foreseeable future.”

Demand in China, a crucial market for Germany’s export-driven economy, has been weighed down by disappointing economic growth and a severe real estate crisis.