Car manufacturer: Mercedes cuts profit forecast – shares lose five percent

A challenging market environment in China and higher costs in the fourth quarter are weighing on the carmaker's annual targets. There was only a sales warning in the summer.

Mercedes vehicles: The passenger car division Mercedes-Benz Cars only expects an adjusted return on sales of two to three percent for 2026. Photo: AP Photo/Stephanie Scarbrough

Dusseldorf. Mercedes-Benz is significantly lowering its profit forecast for the current year. Mercedes justified this in a mandatory announcement on Tuesday with the “increasingly challenging market environment in China”. There would also be higher costs in the fourth quarter, including higher material costs. The shares temporarily lost more than five percent after the adjusted forecast became known.

The car manufacturer had previously expected revenues to be “significantly above” the previous year’s level. That would have been a profit increase of at least 15 percent.

The car manufacturer is suffering from the collapse in China business. Deliveries in the once lucrative car market have collapsed by 29 percent after nine months.

The dominant passenger car division only expects an adjusted return on sales of two to three percent for 2026. The group had previously promised three to five percent.

Mercedes is also correcting the free cash flow of its industrial business downwards. According to the company, it is “just under” the threshold of the previous range (“slightly below the previous year’s level”) and is now “significantly below the previous year’s level”. The targets for Mercedes-Benz Vans (adjusted return on sales eight to ten percent) and Mercedes-Benz Financial Services (adjusted return on equity twelve to 14 percent) remain unchanged.

Mercedes only cut its sales forecast in the summer. The group will present its quarterly figures on Wednesday.

More soon.

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