The profits of German automotive giants Mercedes-Benz and Porsche drastically plummeted in the third quarter due to a significant decline in demand in China. Both companies announced extensive cost-cutting measures to alleviate financial pressure.
At Mercedes-Benz, operating margins fell from 12.4 percent last year to 4.7 percent in the third quarter of 2024, which pushed the stock price down by over three percent. Net profit dropped to 1.7 billion euros, while revenue decreased by 6.7 percent to 34.5 billion euros. Sales in China declined by 17 percent, while the German market recorded a drop of 25 percent.
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"Even Porsche had to accept a significant decline in operating profits.
The losses at both companies reflect a general weakness in the European automotive sector. While Renault was able to maintain its financial targets, other large corporations like Volvo and Volkswagen are struggling with similar challenges and have had to repeatedly lower their sales forecasts.
Mercedes-Benz sees increased operating costs as a result of incentives for electric vehicles and financial support for struggling dealers in China.
Investments in electric vehicles ahead of the planned EU ban on internal combustion engines by 2035 have proven problematic, as demand for electric vehicles in Europe is significantly below expectations. Wilhelm stated: "The demand for battery-powered electric vehicles in Europe is significantly lower than the industry expected.
