In difficulty, Mercedes-Benz lowers its profitability forecasts for 2026 in the face of Chinese competition
The German manufacturer is experiencing a sharp drop in profitability against a backdrop of Chinese competition and high costs, impacting its forecasts and its strategy.
The profitability of the Mercedes-Benz automotive branch was almost halved in the third quarter of 2026, to 2.5% compared to 4.8% a year earlier. This decline weighed heavily on the adjusted operating profit (Ebit) of the automotive segment, which fell by more than half to 560 million euros. The Stuttgart manufacturer attributes this decline to stiff competition in the Chinese market and high spending on product launch campaigns.
“Market conditions became even more difficult during the year, particularly in China,” Mercedes-Benz CEO Ola Källenius said in a statement. In this country, sales of cars from the star brand fell by almost a third in the third quarter (-31%), to some 86,800 units.
Downward revision of forecasts for 2026
On Tuesday, in this context, Mercedes-Benz lowered its forecasts for 2026. For its automotive division, the group now only anticipates an adjusted operating margin of between 2 and 3%, compared to 3 to 5% previously. The operating profit of the group, which also markets light utility vehicles and offers financial services, is now forecast at the 2025 level, and no longer significantly increasing.
Faced with a difficult context, the manufacturer, like its German rivals Volkswagen and BMW, intends to significantly reduce its costs in order to remain competitive. Management discusses the outlines of a savings plan with employee representatives. This could provide for an increase in working hours without a salary increase, as well as an increased presence of teams on sites. Mercedes also announced the relaunch, from December 2026, of a voluntary departure program intended for indirect functions in Germany.
Between July and September, the group's published Ebit stood at 1.78 billion euros, an increase of 136.4%. This progression is, however, explained by "less significant adjustments" than at the same period a year previously. Mercedes' net profit reached 1.52 billion euros, up 27.6%, driven by increased deliveries in Europe (+5%) and the United States (+6%). Year-on-year, sales of 100% electric vehicles increased by 52% in the third quarter, exceeding 78,000 units.
Machine-translated from French
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