Mercedes profit rises 13.5% but China car sales slump 30%, dragging down 2026 outlook

Group profit snaps a three-year losing streak

Mercedes-Benz booked a net profit of 1.09 billion euros for the April-to-June period, a 13.5% rise from 957 million euros a year earlier (Focus, Tagesspiegel, tagesschau.de). It was the first time since the second quarter of 2023 that the DAX-listed company posted a year-on-year increase in its quarterly bottom line. Operating profit (Ebit) jumped 21.5% to roughly 1.55 billion euros, while revenue slipped 3.3% to just over 32 billion euros.

The revival at group level was powered almost entirely outside the core passenger car unit. The vans division lifted its operating result by 83%, and the financial-services arm delivered a 92% surge, Handelsblatt reported. A cost-cutting programme launched more than a year ago also fed through: general administrative expenses in the first half were 14% below the prior-year figure, and around 5,500 employees are estimated to have left through a voluntary scheme that expired in the spring (Handelsblatt).

Collapse in the passenger car business

Those gains were nearly wiped out by the dominant Mercedes-Benz Cars segment. Its operating result, unadjusted, crashed 94% from 783 million euros to just 49 million euros (DIE WELT). The figure included a writedown of more than 700 million euros on Chinese participations. Even on an adjusted basis, segment Ebit fell 26% to 909 million euros.

The adjusted operating margin before interest, taxes and special items shrank to 4.0%, down from 6.2% a year ago and from 9.6% in the first half of 2024 (Handelsblatt). The 4.0% print sits at the bottom of the company’s own full-year target corridor of 3% to 5%.

China: a 30% plunge the company could not offset

Mercedes sold 417,865 passenger cars in the second quarter, nearly 7% fewer than a year earlier (tagesschau.de). In China, deliveries tumbled 30%, a decline management blamed on intensified market pressure, a less favourable model mix and launch-related costs (DIE WELT, Tagesspiegel). Rising volumes in Europe (up 4%) and the United States (up 10%) were far too small to compensate.

Total group unit sales, including vans, reached roughly 512,000 vehicles, down 6%. The weakness in China forced the company to revise its 2026 guidance. Mercedes now expects full-year passenger car sales and group revenue to come in slightly below the prior-year level instead of matching it (DIE WELT, N-tv).

In the second half of the year we are focusing on bringing more new models to our customers and further improving our cost position and productivity.

Electric vehicle deliveries offer a bright spot

Battery-electric vehicle sales provided one of the few unambiguous positives. The company delivered 52,852 EVs in the quarter, 51% more than a year earlier, driven by an 87% surge on the European market (tagesschau.de). The rollout of new electric models is accelerating, though the overall volume remains a fraction of the combustion-engine fleet.

Savings push and labour tensions

A broad efficiency programme is beginning to reshape the cost base, but it is also stirring friction. In late June, Mercedes tightened its austerity measures by postponing a collectively agreed special payment to 2027 and opening a debate on labour costs in Germany, suggesting that employees should work more for the same pay. The move triggered protests from workers (Focus).

After six months, the group result stands at roughly 2.52 billion euros, down 6.3% year-on-year, while six-month revenue is off 4.1% and Ebit lower by 3.1% (Focus, DIE WELT). The longer trend is stark: full-year profit halved from 10.4 billion euros in 2024 to 5.3 billion euros in 2025 (DIE WELT), and the stock has shed more than a quarter of its value since the start of 2026 (Süddeutsche Zeitung).