Crisis in German automotive. Mercedes lowered its targets

German automotive giant Mercedes-Benz reduced its profit targets after experiencing sharp losses in China, the world's largest car market.

The company lowered its expectations with the data it announced today, thus becoming the third largest German manufacturer to take this step after BMW and Volkswagen.

The stagnation in the Chinese market, fierce competition from local rivals and rising raw material costs are shaking the automotive industry, which is considered the locomotive of the German industry.

According to the new forecasts shared by the company, the core profit of 2026 is no longer expected to increase by at least 15 percent as previously targeted.

According to the AFP agency, Mercedes-Benz estimates that this profit will remain flat at the level of 5.8 billion euros (approximately 322.41 billion Turkish Liras) recorded in the previous year.

The profit margin expectation of the main automobile unit was also reduced to 2 to 3 percent from the previously announced range of 3 to 5 percent.

According to the preliminary data announced, the company's core profit in the third quarter was 1.77 billion euros (approximately 98 billion 391 million Turkish Liras); The profit margin in the main automobile business remained at 2.5 percent.

Mercedes-Benz will publish detailed financial statements for the third quarter tomorrow.

The lowering of the targets also met with a rapid reaction in the stock market. After the decision was announced, Mercedes-Benz shares lost 4.2 percent of their value.

The real development that erodes the profits of German producers is the dominance of Chinese local producers in the market.

Mercedes-Benz's vehicle deliveries in China decreased by a further 29 percent in the nine months to the end of September this year, after last year when they fell to the lowest level since 2016.

Losing share in the world's largest automobile market triggers a painful transformation for the automotive industry, Germany's largest source of employment.