Key Highlights
- First quarter net earnings declined 17.2% to €1.43 billion, while revenues contracted 5% to €31.6 billion
- Chinese market deliveries plummeted 27% to 111,621 vehicles, pulling overall sales volume down 6%
- American market vehicle sales surged 20% to 81,060 units, helping to mitigate Chinese market losses
- Battery electric vehicle sales increased 9% to 44,258 units; plug-in hybrid sales declined 20%
- Annual 2026 projections remain unchanged, with EBIT forecast significantly above 2025 performance
Mercedes-Benz kicked off 2026 on shaky ground, posting first-quarter net earnings that tumbled 17.2% to €1.43 billion compared to €1.73 billion in the prior year period. Revenues contracted 5% to €31.6 billion, though this figure marginally exceeded analyst forecasts.
Mercedes-Benz Group AG, MBG.DE
Operating profit declined 17% to €1.90 billion. On an adjusted basis, EBIT experienced a more pronounced decline of 30%, settling at €1.77 billion.
The primary culprit was the Chinese market. Deliveries in what represents the automaker’s single largest market worldwide plunged 27% to 111,621 vehicles. Management attributed the decline to scheduled product transitions, macroeconomic headwinds, and intensifying competition.
Across the broader Asian region, unit deliveries contracted 24% to 152,662 vehicles. This represents a significant setback for a luxury brand that has historically depended heavily on affluent Chinese consumers.
The passenger Cars division absorbed the most severe impact, with operating profit plummeting 54% to €809 million. Return on sales deteriorated to 3.5%, down sharply from 7.3% during the corresponding quarter last year.
American Market and Vans Division Provide Bright Spots
Despite the challenges, certain segments delivered positive results. The Vans division posted an impressive quarter, with operating profit jumping 71% to €392 million, even as unit volume slipped 3%.
American market passenger car deliveries climbed 20% to 81,060 vehicles, delivering crucial relief from the Chinese market contraction. CFO Harald Wilhelm highlighted that robust appetite for recently launched models and solid order backlogs position the organization for improved performance during the year’s second half.
Fully electric vehicle deliveries advanced 9% to 44,258 units, representing 19.4% of first quarter sales volume. Plug-in hybrid vehicles experienced a contrasting trend, dropping 20% to 37,079 units.
Total vehicle deliveries in the first quarter reached 419,430 units, representing a 6% year-over-year decrease.
Financial Position and Capital Allocation Remain Solid
Adjusted industrial free cash flow strengthened 18% to €2.84 billion. Net industrial liquidity expanded 5% to €33.81 billion since the conclusion of 2025.
Research and development expenditures decreased 3% to €2.25 billion, while capitalized development investments rose 21% to €861 million. Property, plant and equipment capital spending increased 9% to €749 million.
Basic earnings per share decreased to €1.49 from €1.74 in the year-ago period.
Regarding corporate developments, Mercedes-Benz executed agreements in April 2026 to divest the Athlon Group to BNP Paribas, with transaction completion anticipated during the year’s latter half. The organization also advanced its “Own Retail” restructuring initiative in Germany, disposing of six additional operations during the first quarter.
Mercedes-Benz reiterated its complete 2026 annual guidance, forecasting group revenues approximately matching prior year levels and operating profit substantially exceeding the 2025 result.
