The German automaker is pledging to cut costs through ‘efficiency increases’ after weak Chinese demand hits profits.
Profits at Mercedes-Benz fell by around 54% year-on-year in the third quarter of this year, according to the firm’s earnings report released on Friday.
From July to September, net profit fell to €1.7bn from €3.7bn a year earlier. Revenue was recorded at €34.5bn, down around 7%.
At Mercedes’ core car division, meanwhile, adjusted earnings before interest and taxes (EBIT) dropped 64% year-on-year, coming in at €1.2bn.
“The Q3 results do not meet our ambitions,” Harald Wilhelm, chief financial officer at Mercedes-Benz Group AG, said in the earnings report.
“We are taking a prudent view about market evolution going forward and we will step up all efforts on further efficiency increases and cost improvements across the business,” he added.
Mercedes cited a number of factors behind the disappointing results, notably “weaker macroeconomic conditions and fierce competition, mainly in Asia”.
China’s post-pandemic economic slowdown, aggravated by its property woes, has dented demand – dealing a blow to the carmaker.
Mercedes similarly blamed lower sales on product transitions, where existing models are being replaced by new versions.
For instance, Mercedes’ new G-Class SUV models will be available in the next quarter.
The firm added that sales of its top-end, luxury vehicles should see “positive momentum” in the next quarter, “supported by availability of the G-Class, the Mercedes-AMG E-Class, Mercedes-AMG GT and the SL”.
Looking ahead, the manufacturer forecast that full-year sales for its car division will come in “slightly below” the total seen in 2023.
“The guidance for the adjusted return on sales is seen at 7.5% to 8.5%,” it added.
Mercedes’ share price was down around 1.17% in daily trading as of around 11h15 CEST, at €57.68.
