Frankfurt (Germany): German luxury car maker Mercedes-Benz said Friday that third-quarter profits fell by more than 50% due to weakness in the key Chinese market.
The group said net profit was 1.72 billion euros ($1.86 billion), down from 3.7 billion euros a year earlier, and sales were down about 7% to 34.5 billion euros.
Deliveries decreased by 3% due to a 13% decline in China. Global sales of luxury cars, the most profitable category, fell by 12%.
The automaker said the poor performance was due to “challenging market conditions and intense competition, particularly in China.”
Mercedes chief financial officer Harald Wilhelm acknowledged that earnings “did not meet our targets.”
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As the world’s second-largest economy struggles through a period of turmoil and increased competition from its own automakers, the German auto giant is struggling in one of its most important markets, China.
Mercedes said it expects annual sales in 2024 to be slightly lower than a year ago, and to be on par with the third quarter in the fourth quarter.
The company has already revised its annual outlook downward twice in the third quarter, and expects operating profit to be “significantly below the previous year’s level.”
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Automakers across Europe are struggling with high domestic costs, a slow transition to electric vehicles and challenges in China, which has long been a major source of growth.
Brussels also plans to impose additional tariffs on imports of electric cars from China, creating a headache especially for German carmakers that have invested heavily in the country and fear retaliation. .