Mercedes-Benz has reported a steep decline in profits during the first nine months of the year, citing weaker demand, ongoing trade challenges and extensive restructuring efforts across its international operations. Although the company continues to generate high revenues, rising costs and shrinking volumes are putting pressure on financial performance.
The Stuttgart-based carmaker announced that net profit dropped to approximately €3.9 billion from €7.8 billion a year earlier — a fall of just over 50%. Revenue in the most recent quarter also slipped by nearly 7% to around €32 billion.
Cost-cutting and restructuring aim to restore margins
In response, the executive board plans sweeping cost adjustments. Mercedes is targeting a 10% reduction in both production and fixed costs by 2027. Procurement efficiencies are expected to deliver further savings as the company reviews spending across all major components.
Part of the effort includes a voluntary exit program for employees in non-production roles. Management estimates the restructuring package to be worth around €5 billion when compared with earlier internal projections. Most special charges taken this year are tied to those personnel measures in Germany, combined with similar steps internationally.
Operating profit before interest and taxes (EBIT) came in at about €2 billion for the quarter, down from €2.5 billion in the same period last year.
Sales struggles across key markets
The downturn reflects broader pressure on global automotive demand — particularly in two of Mercedes’ most important markets: China and the United States. Between July and September, deliveries of passenger cars and vans fell by roughly 12% to just over 525,000 units.
For the full nine-month period, Mercedes recorded a 9% decline to around 1.6 million vehicles sold. The slump follows another challenging year in 2024, when sales already dropped 4% amid industry-wide headwinds.
Premium strategy questioned as competition intensifies
Mercedes has long emphasized higher-margin models in the premium segment, yet that strategy is now facing new challenges. Increased competition in electric mobility — particularly from Chinese manufacturers — and geopolitical trade tensions are reshaping the market landscape.
Despite the weaker figures, leadership maintains that the outlook remains within the company’s annual forecast. Efforts to streamline production, adjust pricing and speed up electrification are expected to support a gradual recovery. Whether the measures will be enough to restore historical profit levels in a cooling global market remains a central question for the months ahead.
