Mercedes-Benz posted a 22% increase in second-quarter operating profit on Tuesday, driven by aggressive cost-cutting measures, but lowered its outlook for car sales and group revenue as weakness in China continues to weigh on its core automotive business.
The German luxury carmaker reported earnings before interest and tax (EBIT) of €1.5 billion, slightly below analysts’ consensus estimate of €1.6 billion.
Mercedes now expects both car sales and group revenue in 2026 to come in slightly below last year’s levels, reversing its earlier forecast for broadly unchanged performance.
The group’s earnings were supported by stronger contributions from its financial services and vans divisions, alongside a €131 million gain linked to the planned disposal of its leasing subsidiary Athlon.
“Despite a demanding market environment, we remained on track in the second quarter while continuing to advance our product launch programme,” chief executive Ola Kaellenius said, adding that further cost-cutting measures would continue in the second half of the year.
Like rivals Volkswagen and BMW, Mercedes is restructuring its cost base to offset rising tariff costs, intensifying competition from Chinese manufacturers and mounting pressure on German production sites.
The company said lower administrative and research and development spending helped improve second-quarter earnings. Building on a 25% reduction in fixed costs since 2019, Mercedes began stepping up global productivity initiatives in June, with a particular focus on its operations in Germany.
