Mercedes-Benz lowers 2026 margin outlook on weak China demand and rising costs

what happened

Mercedes-Benz has reduced its full-year earnings forecast, Dow Jones Newswires reports, pointing to a worsening market in China and higher expenses.

The German carmaker now projects an adjusted return on sales of 2% to 3% for this year, versus an earlier range of 3% to 5%. Its earnings before interest and tax are now seen roughly at the prior-year level of 5.82 billion euros ($6.5 billion), whereas the group had previously forecast a result well above that figure.

In a statement, the company cited a tougher environment in China and increased fourth-quarter costs, including more expensive raw materials.

why it matters

China is a key market for premium carmakers, so weaker demand there typically weighs on Mercedes-Benz shares and on other European auto producers. Investors will watch whether the fourth-quarter cost pressure spreads across the sector.

market impact

Mercedes-Benz and European carmakers: weaker China demand and higher costs weigh on sentiment

• ▼Mercedes-Benz shares pressure down — the guidance cut signals softer China sales and higher expenses

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