A difficult quarter for Mercedes-Benz
Mercedes-Benz recently announced a 64% drop in profits in its automotive division for the third quarter, a result that surprised analysts negatively. This decline was partly attributed to a slowdown in consumer spending in China, a crucial market for the German carmaker.
CFO Harald Wilhelm said that the results do not meet the group’s ambitions, highlighting the need to intensify cost cuts.
Renewal costs and difficult market
In addition to the decline in demand in China, profits were also influenced by the cost of renewing the models. Mercedes-Benz is facing a difficult market, in particular for the new versions of the G-Class SUV, which is due to be launched in the next quarter. The car manufacturer had to revise its annual sales forecasts, predicting slightly lower results compared to the previous year and sales in the fourth quarter in line with those
of the third.
Future strategies and profit margins
During the third quarter, Mercedes cut its full-year profit margin target twice, joining a growing number of European rivals that are facing a shrinking Chinese car market. This situation has led to diminishing profits and margins, forcing companies to review their strategies. The German car manufacturer is trying to adapt to these challenges, but the future remains uncertain
.