Mercedes-Benz reports a pronounced decline in profit, revenue and sales.

Mercedes-Benz has, despite extensive product presentations last year, recorded a pronounced economic downturn. According to the company, profit, revenue and sales fell noticeably. In the first nine months, there was a decline in the group's net income from €7.81 billion to €3.88 billion. Revenue also shrank to €98.5 billion. Overall, the company delivered around 1.8 million vehicles, which corresponds to a nine percent decrease.

Headwinds in the China business and intense competition

Especially in its core market of China, Mercedes-Benz lost market share. There, sales fell by 19 percent. The premium and luxury market is characterized by fierce competition from Chinese manufacturers, which are pursuing aggressive pricing. New models from the group are not expected to reach a meaningful volume in the market until 2027, according to industry insiders.

Strategic challenges

Several decisions of the past continue to affect today. The early focus on pure electric drivetrains as well as a one-sided orientation toward higher-priced segments are considered essential factors. Moreover, the chip shortage during the COVID-19 pandemic led to a prioritization of expensive models, which subsequently was misinterpreted as a long-term demand trend. However, these assumptions proved untenable in the market environment.

Cost pressures and tariff policy framework conditions

In addition, high cost structures, especially in Germany, weigh on profitability. Along with rising production and administrative costs, the US tariff policy also weighs on the results.

Cost-cutting program and model offensive to enable recovery

The manufacturer has launched a comprehensive cost-reduction program. By 2027, production and fixed costs are expected to fall by ten percent each. Material costs are also being optimized. In addition, a severance program for employees in indirect areas is underway. In parallel, the company is bringing new models to market in various segments, including vehicles for the entry-level and mid-range segments.