Mercedes-Benz experienced a decline in core car sales throughout 2024, reflecting a challenging year for the auto industry, marked by weakening demand in a fragile global economy, particularly in key market China, the German luxury automaker reported on Friday.
This downturn in sales, coupled with disappointing electric vehicle numbers, is putting pressure on the carmaker as it navigates a difficult economic landscape.
Sales decline across key markets
The company sold 1,983,400 cars during the year, a 3% decrease compared to 2023, with sales significantly impacted by a 7% drop in China and a 3% decline in Europe.
These figures highlight the broad nature of the challenges facing Mercedes, as sales fell in two of its key regions.
The automaker’s battery-electric vehicle (BEV) sales fell by 23% to 185,100 vehicles, adding more pressure to the company’s performance.
This significant drop in EV sales comes as new, stricter EU CO2 emission reduction targets take effect this year, which could potentially mean costly pooling deals or substantial fines for Mercedes if the BEV sales numbers do not improve.
Profit targets lowered as market outlook dims
Mercedes-Benz cut its full-year profit margin target twice in 2024 and has said it will further intensify cost-cutting measures. The automaker joins a growing number of European rivals citing a weakening Chinese car market as the primary reason for reduced profits and margins.
Reuters reported on Tuesday that Mercedes also plans to lower its mid-term profitability targets, as market conditions are not expected to improve significantly in the near future, according to a source familiar with the matter.
Full-year financial results awaited
The carmaker is scheduled to report its full-year 2024 financial results on February 20, at which time the extent of the year’s challenges will be clarified.
These results will be closely watched by investors, analysts, and industry watchers as they provide a comprehensive overview of the carmaker’s financial performance in 2024 and the potential impact of recent market developments on its future strategy.
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