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Mercedes-Benz financial outlook and China market pressure

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2026-11-01 05:43 UTC → 2026-11-01 18:22 UTC · added ~~removed~~

Mercedes-Benz has lowered its 2026 financial outlook, specifically reducing the adjusted profit margin target for its passenger car segment to a range of 2% to 3%, down from a previous estimate of 3% to 5%. The company cited intensifying competition in China, rising material costs, and a significant collapse in demand within the Chinese market as primary drivers for the revision. While the company reported growth in battery-electric vehicle sales and net profit increases, it faces operational pressure from domestic Chinese competitors. Specifically, the third-quarter adjusted return on sales for the automotive division fell to 2.5%, which is nearly half of the 4.8% recorded during the same period last year. This decline was driven by a 31% drop in sales volume in China, which saw 86,800 delivered vehicles, despite growth in Europe and the United States and a 60.5% increase in battery electric vehicle (BEV) sales, which reached 68,428 units. To address these challenges, leadership has announced plans to reduce fixed costs through a voluntary redundancy programme in Germany and is considering a more modularized vehicle architecture to lower development and manufacturing expenses. This strategy, intended for the 2030s model generation, aims to use shared technical modules across various models to achieve cost savings similar to those used by mass-market manufacturers. Additionally, the company is moving toward localizing component procurement in China to reduce dependence on European supply chains.

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