Mercedes-Benz lowers 2026 financial goals

Mercedes-Benz has reduced its financial targets for 2026, citing a challenging market and rising costs. The company’s third-quarter sales fell 6 percent to 491,700 units, prompting it to revise its expectations for the full year.

Operating margin forecast revised

For its automotive division, Mercedes-Benz now expects an adjusted operating margin of 2 to 3 percent in 2026, down from the earlier range of 3 to 5 percent. The company no longer anticipates a significant increase in operating profit, only a return to 2025 levels.

Third-quarter results slightly better than expected

In the third quarter of 2026, Mercedes-Benz achieved an operating profit of 1.77 billion euros, slightly exceeding expectations. Detailed results will be released on October 28, 2026, but the company remains focused on cost-cutting measures.

Cost reduction plans under discussion

To stay competitive, Mercedes-Benz is exploring cost-cutting strategies, including extending working hours without additional pay and increasing on-site workforce presence. The board’s chairman, Ola Källenius, emphasized the need to maintain competitive pricing for quality products.

Chinese market challenges intensify

Mercedes-Benz, like its rival BMW, is struggling in China, where local manufacturers are driving down prices and increasing competition. Volvo Cars, owned by the Chinese company Geely, reported that new Chinese brands have made profitability nearly impossible for traditional premium brands.

BMW accelerates job cuts

BMW recently accelerated its plan to cut 8,000 jobs by the end of 2027, following the success of its voluntary departure program. This move reflects the broader industry pressure to reduce costs amid fierce competition.