German carmaker Mercedes-Benz on Wednesday said its third-quarter profit fell nearly 31% year on year, as Germany’s crucial automotive sector struggles amid rising costs, competition, and trade barriers. Profit fell to €1.19 billion from €1.71 billion in the third quarter of 2024.
Adjusted group earnings before interest and tax (EBIT) slipped to about €2 billion in the quarter from €2.5 billion a year earlier, weighed down by lower sales volume, increased expenses due to tariffs, and negative development of foreign exchange rates, Mercedes said.
The Stuttgart-based firm said the figure was adjusted for special items totaling €1.34 billion, mostly related to €876 million in job-cutting costs in Germany and savings measures abroad.
“Our third-quarter results are in line with our full-year guidance,” said CEO Ola Källenius. “Our biggest product and tech launch program is well on track: The new CLA and GLC mark the beginning of a series of new models across all segments and drive trains, tailored to specific market and customer needs. We remain focused on enhancing customer experience while driving efficiency across our company.”
Cost-cutting
To boost profitability, Mercedes announced a cost-cutting plan in February aimed at reducing production and fixed costs by 10% by 2027, while also improving material efficiency. The company reached an agreement with the works council on a severance package for employees in indirect roles. Management said the program is expected to save around €5 billion globally.
The sharpest quarterly revenue decline was reported in China, where sales fell 26.9% year over year. However, year-to-date in September, deliveries to customers increased by 6% in the US market. Third‑quarter sales in Europe increased by 2%, while sales in the Gulf States (+33%), Türkiye (+15%), and South America (+45%) saw strong growth.
Outlook
Overall, Mercedes’ profit for the first nine months fell by half, with group earnings dropping 50.3% to €3.9 billion from €7.8 billion a year earlier, the automaker reported. The Mercedes results follow a pattern of decline across Germany’s carmaking industry, with luxury manufacturer Porsche reporting a 95.9% plunge in profit over the first nine months of the year.
Overall, Mercedes-Benz confirms its group guidance. “The environment in which Mercedes-Benz operates remains dynamic,” the company explains. “Mercedes-Benz is working against it with a determined team using all the levers at its disposal.”
“The company will press ahead with its product and tech launch program and will remain focused on enhancing the customer experience. At the same time, Mercedes-Benz will continue to drive efficiency across the company and generate attractive returns for its shareholders,” the press release concluded.
