Mercedes-Benz Group cut its full-year profit margin forecast on July 26 due to poor sales and earnings in the second quarter of this year, but its new models are expected to help the group cope with fierce competition in the Chinese market in the second half of this year, according to Reuters.
Mercedes-Benz Q2 performance.
photo source: Mercedes-Benz Group, Mercedes-Benz performance in the first half of the year.
photo source: Mercedes-Benz Group, Mercedes-Benz Group reported that revenue in the second quarter of this year reached 36.
743 billion euros, down 4% from the same period last year.
profit before interest and tax (EBIT) fell 19% to 4.
037 billion euros Adjusted EBIT was 4.
049 billion euros, down 22% from the same period last year, while net profit was 3.
062 billion euros, down 16% from the same period last year.
In the first half of this year, the group’s revenue reached 72.
616 billion euros, down 4% from the same period last year.
adjusted profit before interest and tax was 7.
647 billion euros, down 28% from the same period last year.
net profit was 6.
087 billion euros, down 20% from the same period last year.
and sales were down 6% over the same period.
Electric vehicle sales fell 17%.
Performance of Mercedes-Benz Automotive Division Q2.
Photo Source: Mercedes-Benz Group, Mercedes-Benz Automotive Division performance in the first half of the year.
Photo Source: Mercedes-Benz Group, of which, Mercedes-Benz Group’s second-quarter revenue was 27.
17 billion euros, down 4% from a year earlier.
Adjusted EBIT was 2.
763 billion euros, down 28% from a year earlier, while London Stock Exchange Group (LSEG) had expected a decline of 26%.
adjusted return on sales was 10.
2%, down 3.
3% from a year earlier.
In the first half of this year, revenue from Mercedes-Benz’s auto division was 52.
883 billion euros, down 6% from a year earlier.
adjusted profit before interest and tax was 5.
086 billion euros, down 36% from a year earlier.
and the adjusted return on sales was 9.
6%, down 4.
5% from a year earlier.
Mercedes-Benz expects the adjusted return on sales this year to be in the range of 11%, below its previous target of 12%.
The low expectation caused the group’s shares to fall 1.
4 per cent in morning trading.
At present, German automakers have been grappling with weak demand for electric vehicles, while facing fierce competition in the Chinese market, supply bottlenecks and persistently high interest rates.
Mercedes-Benz said it expects sales of plug-in hybrid vehicles to increase in the second half of this year as demand for hybrid models increases in Europe and the United States, while electric vehicle sales are lower than expected.
Bernstein analysts wrote in a note to clients that while some investors expected Mercedes-Benz to issue a profit warning, the group only cut its profit margin forecast.
This “may make investors breathe a sigh of relief”.
Citigroup analysts wrote in a note to clients: “overall, Mercedes-Benz’s execution has recovered, but the overall sales and high-end sales mix is still weak.
” Mercedes-Benz said its economic outlook was still uncertain, but consumer sentiment in Europe was rising and sales and demand in the US were “strong”.
Source: Mercedes-Benz Group, however, Mercedes-Benz Group is “cautious” about the Chinese market and expects its entry-level and core model segments to face fierce competition.
at the same time, the group will “seek countermeasures that can successfully defend its leading position in the high-end model market”.
Ola Kaellenius, chief executive of Mercedes-Benz, told investors on a conference call that the group would continue to adopt a flexible approach to provide fuel and electric models to consumers on demand.
But he said the group had to compete with electric carmakers in China because of its high acceptance of electric models in China, the world’s largest car market.
Kang Linsong said: “this is a competition that must be taken part in.
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