Mercedes-Benz cuts 2026 profit outlook on tough China market

German luxury car manufacturer Mercedes-Benz has lowered its profit expectations for 2026 due to challenging conditions in the Chinese market and rising material costs, the company announced on Tuesday. The company now anticipates core profit to be in line with last year's €5.8 billion, a decrease from its earlier forecast of a minimum 15% increase.

Profit margins for Mercedes-Benz's core car business are now projected to range between 2 and 3 percent for the year, down from the previously expected 3 to 5 percent. This marks the third consecutive major German automaker to revise its annual outlook downward, following BMW and Volkswagen, who also cited weak performance in China, the world's largest automotive market.

In the nine months leading up to September, Mercedes-Benz's vehicle deliveries in China experienced an additional 29% decline, following the entry of local competitors such as Xiaomi and BYD into the market, coupled with a sluggish domestic economy dampening overall demand.