FRANKFURT, Germany — German luxury carmaker Mercedes-Benz on Friday reported a sharp drop in second-quarter net profit on weaker sales of electric vehicles and cooling demand in key market China.
Net profit fell by 15.9 percent compared to the same period last year, to just over 3.0 billion euros ($3.3 billion), the Stuttgart-based group said.
Group revenues were down nearly 4 percent to 36.7 billion euros.
Mercedes said the auto sector continued to face “a degree of uncertainty” in terms of the global economic outlook, geopolitical events and trade policy.
The group now expects an adjusted return on sales ― a key measure of profitability ― in the range of 10 to 11 percent in 2024, compared with 10 to 12 percent previously.
Sales of Mercedes cars fell by 3.7 percent to 496,712 units between April and June, which the group said was partly due to “model changeovers” as customers waited for new models to arrive before buying.
It also blamed a “subdued market environment” in Asia, with sales in China down 6 percent as European carmakers grapple with fierce competition from local brands, particularly in the electric segment.
The group’s sales of battery-electric vehicles (BEVs) plummeted by 25 percent in the second quarter, hammered by the growing Chinese competition and softer demand in Europe as governments pare back incentives.
The “market dynamics” for BEVs in 2024 were weaker than “what most in the industry or industry observers had expected” a few years ago, Chief Executive Officer Ola Kallenius told reporters in a call.
But “in the face of this uncertainty,” Mercedes was nevertheless “in a good position, because we are flexible,” he added.
Mercedes was eyeing a pickup in overall sales in the second half of the year, Kallenius said, helped by “launches of new models particularly in the top-end segment.”
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