Mercedes-Benz cuts 2026 profit outlook on tough China market

Mercedes-Benz has reduced its profit forecast for 2026, citing challenging conditions in China and increased material costs. The company now anticipates core profit to match the previous year's 5.8 billion euros, marking a decrease from an earlier forecast of a potential 15% increase. Core car business profit margins are now projected to fall between two and three percent for the year, down from the anticipated three to five percent.

This marks Mercedes as the final major German automaker to revise its annual outlook, following BMW and Volkswagen, who both cited weak performance in China, the world's largest automotive market. China, previously Mercedes' second-largest market, saw a 29% decline in vehicle deliveries during the nine months leading up to September, with local competitors Xiaomi and BYD capturing significant market share. This decline is exacerbated by a sluggish domestic economy in China.