Mercedes-Benz lowered its full-year car sales forecast, citing weakness in China, the company announced on Tuesday. The luxury automaker now expects car unit sales to be slightly below the previous year's level, with a potential decline between 2% and 7.5%, according to definitions in its 2025 annual report. Group revenue is also projected to come in slightly below last year's level.
Despite the cautious outlook, Mercedes-Benz reported a 22% rise in second-quarter operating profit to €1.55 billion, up from €1.27 billion a year earlier. Revenue fell by 3% to €32.1 billion from €33.2 billion. CEO Ola Källenius said the company remained on track despite a demanding market environment.
Second-quarter operating profit, up 22% year on year.
The core cars division's adjusted operating profit fell by 26% to €909 million. Reported operating profit at the division dropped sharply to €49 million from €783 million, including €704 million in write-downs linked to investments in China. Mercedes-Benz attributed the decline to tougher market conditions in China, a less profitable model mix, and costs related to product updates.
Sales in China declined by 30% in the second quarter. Excluding China, global car sales increased by 2% year on year. Overall car sales climbed by 4% in Europe and by 10% in the United States. Mercedes-Benz expects the global car market to remain weak for the full year.
Meanwhile, sales of fully electric Mercedes-Benz cars surged 51% year on year to 52,852 units in the second quarter, driven by 87% growth in Europe. BEV order intake in Europe more than doubled during the quarter.
Despite a demanding market environment, we remained on track in the second quarter.
Mercedes-Benz also identified security and defence vehicles as a "strategic development area" and signed a memorandum of understanding with Munich-based defence company TYTAN to explore a potential partnership. The partnership includes a G-Class-based system for drone defence and operations and a Sprinter-based mobile drone carrier and command unit.
The company joins Volkswagen and BMW in warning on a tougher Chinese market. BMW lowered its full-year automotive profit-margin forecast in June to between 1% and 3% and is preparing further cost-cutting measures. Porsche said it would cut 5,000 additional jobs by 2035, totalling about 9,000 planned reductions. Mercedes-Benz shares rose by more than 5% in Frankfurt on Tuesday morning.