German automaker Mercedes-Benz has revised its full-year vehicle sales forecast downward, citing a severe 30% quarterly drop in Chinese deliveries that weighed on group profitability.
The company now expects total annual passenger car sales to reach roughly 1.7 million units, down from the previously projected 1.8 million units.
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Chief Executive Officer Ola Källenius said the company remains committed to its long-term strategy in China despite high market volatility, declining demand, and intense price competition from domestic electric vehicle manufacturers.
"If you want to be a global player, you have to be there," Källenius said, adding that Mercedes-Benz aims to leverage local development, production, and technology partnerships to strengthen its position without engaging in cash-burning price wars.
"We don't want to buy market share and burn cash," he stated.
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Financial Impact and Cost-Cutting Measures
Second-quarter earnings for the passenger car division fell sharply to 49 million euros, heavily impacted by 704 million euros in impairment charges on Chinese investments and restructuring costs.
Chief Financial Officer Harald Wilhelm noted that Mercedes-Benz is restructuring its global production network, lowering fixed costs, and shifting key electric vehicle manufacturing to lower-cost facilities.
The company recently invested approximately one billion euros to expand its plant in Kecskemét, Hungary, establishing it as the hub for the new electric C-Class, GLC, and compact G-Class.
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Meanwhile, trade union IG Metall organized major protests across German factories against proposed local wage cuts, unpaid overtime, and deferred bonus payments.
