Mercedes-Benz cuts 2026 profit outlook on tough China market

Mercedes-Benz has reduced its profit forecast for 2026 due to challenging conditions in the Chinese market and rising material costs, the German luxury carmaker announced on Tuesday. The company now anticipates its core profit for the year to be on par with the previous year's €5.8 billion, a decrease from the previously projected 15 percent increase.

Core car business profit margins are now expected to range between two and three percent, down from the previously anticipated three to five percent. This makes Mercedes the final of the "big three" German automakers to downgrade its annual outlook, following BMW and Volkswagen, both of which cited weakness in China, the world's largest automotive market.

Mercedes-Benz's vehicle sales in China, already at their lowest since 2016, declined by a further 29 percent in the nine months leading up to September. The company's local competitors, Xiaomi and BYD, have gained market share as a sluggish domestic economy has dampened demand.