Mercedes-Benz cuts 2026 outlook, citing China and higher costs

Preliminary third-quarter figures from the company came in above the analyst consensus it listed, and the full report is due on 28 October.

Mercedes-Benz said on Tuesday that it now expects a 2026 adjusted return on sales of 2 per cent to 3 per cent for its Cars division. Its previous range was 3 per cent to 5 per cent, the company said in an ad-hoc release.

The company also lowered two other measures. Group EBIT is now expected to be at the prior-year level. Earlier guidance had put it significantly above that level. Industrial free cash flow is now expected to be significantly below the prior year. The company says it will land just below the threshold of its previous guidance, which had been slightly below the prior year.

Mercedes-Benz gave two reasons for the change: a more challenging market environment in China, and higher expected fourth-quarter costs, including higher material costs.

The same release gave preliminary third-quarter figures. Vans adjusted return on sales was 9.4 per cent, against a consensus of 9.1 per cent. Financial Services adjusted return on equity was 13.8 per cent, against 12.4 per cent. Group EBIT was €1.77 billion, against a consensus of €1.6 billion.

The full third-quarter interim report and analyst call are scheduled for 28 October.

The cut lands on a sector already facing a run of setbacks. Volkswagen's deliveries fell 14.3 per cent. The company has a salary freeze through 2030 and has ended labour pacts. A UK motor finance liability is also in the picture. BMW's deliveries fell 6.3 per cent this month. Across the sector, a guidance cut to a 1 per cent operating margin adds to the pressure.