Mercedes-Benz will revise its mid-term profit expectations. This involves a potential cut in passenger car business targets. The global automotive market faces weaker demand. The shift towards electric vehicles (EVs) compounds this. The company will unveil updated profit targets in mid-February. This occurs during its annual Capital Markets Day on February 20. The company will also highlight financial results. This marks a departure from its 2022 forecast. Then, Mercedes-Benz anticipated an adjusted profit margin between 8% and 14%. Despite likely target reductions, Mercedes-Benz aims for a double-digit profit margin. The company plans to cut billions in costs. Specific cost-saving measures remain undisclosed.
Slowing Demand and EV Competition Impact Mercedes-Benz
Weak consumer demand for traditional vehicles impacts the automotive market. The premium segment faces particular challenges. The accelerating shift toward EVs compounds this. Mercedes-Benz expands EV offerings. It has yet to gain a substantial market foothold. Chinese EV manufacturers like Geely, BYD, and SAIC offer competitive prices and innovative designs. Mercedes-Benz’s electric models are seen as more expensive. This slows adoption in an affordability-focused market.
Chinese Market Challenges and Tariff Tensions
China poses challenges for Mercedes-Benz. Sales slowed due to domestic EV brand competition. Chinese consumers are cautious in luxury purchases. This impacts the brand’s performance. China is a critical market for Mercedes-Benz. Chinese EV makers take share in the European market. They offer steep discounts. Chinese government subsidies allegedly support this. The EU imposed higher tariffs on Chinese EVs. This increases retaliation risk from China. Retaliation could strip Mercedes-Benz of key benefits. This includes tax incentives and land subsidies. This impacts profitability. The EU tariffs respond to lower-priced Chinese vehicles. These tariffs raise concerns about retaliation. Retaliation affects Mercedes-Benz’s operations in China. SuperMetalPrice reports that these changes could dramatically alter the landscape of the European auto industry.
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