Mercedes-Benz Posts Solid Earnings Amidst Market Turbulence

Giancarlo Perlas October 25, 2023

Mercedes-Benz Group AG has reported solid third-quarter earnings, demonstrating resilience in the face of a challenging market environment. Despite intense price competition, particularly in the electric vehicle (EV) segment, the company achieved a solid performance.

Image Source: Mercedes-Benz

Solid Earnings in a Competitive EV Market

According to the latest report of the luxury automaker, Mercedes-Benz Group’s Earnings Before Interest and Taxes (EBIT) reached €4.8 billion in Q3. The numbers were down from €5.2 billion in the same period in 2022.

Nonetheless, the company managed to offset higher inflation, currency fluctuations, and supply-chain costs through improved net pricing and increased sales of premium vans.

Sales and Electrification Gains

Mercedes-Benz Cars saw sales reaching 1,529,800 units in the first nine months of 2023, a 2% increase, despite a supplier-related shortage affecting the GLC and E-Class models. Meanwhile, Mercedes-Benz Vans achieved a remarkable 11% increase in sales, totaling 323,500 units in the same period.

Notably, hybrid and electric vehicles accounted for 20% of total sales in Q3, with battery electric vehicle (BEV) sales rising by 97% in the first nine months. Additionally, electric van sales surged by 46%, with plans to introduce an electric G-Class in 2024, emphasizing the company’s commitment to electrification.

Transformation and Safety Focus

In a bid to accelerate the shift to electric mobility, Mercedes-Benz showcased its Concept CLA Class, boasting an impressive efficiency of approximately 12kWh/100km and a range exceeding 750 kilometers. The company is also building a global charging network, with the first hub recently opened in Chengdu, China.

Furthermore, Mercedes-Benz conducted a live frontal-offset crash test involving two electric vehicles, underscoring their commitment to safety. During the collision, both the EQA and EQS SUV maintained their passenger safety cells and automatic high-voltage system shutdown.

Investments and Financials

The earnings report also highlighted the company’s investments and financial health. The free cash flow for the industrial business in the third quarter was €2.3 billion, slightly down from €3.0 billion in the previous year.

Despite this, the net liquidity of the industrial business increased to €28.5 billion. Investments in property, plant, and equipment for the quarter amounted to €0.9 billion, while research and development expenditure rose to €2.5 billion, primarily driven by investments in future platforms and technologies.

Divisional Performance

Mercedes-Benz Cars saw a 3.8% dip in revenue in Q3 due to lower vehicle deliveries, with adjusted Earnings Before Interest and Taxes at €3.3 billion, compared to €4.0 billion in Q3 2022. Notably, the Top-End Vehicle segment continued to perform well, with the S-Class maintaining a market share of above 50% in China. In contrast, the Core and Entry segments saw modest declines, mainly due to model changeovers and mid-lifecycle updates.

Mercedes-Benz Vans reported increased global sales in the third quarter, reaching 105,100 units, a 1% increase. The all-electric van sales doubled compared to the same period last year, accounting for 6% of total sales. In the U.S. market, the division achieved its best sales quarter ever. Improved product mix and lower raw material costs helped increase EBIT by 44% to €743 million.

Mercedes-Benz Mobility faced challenges, with an adjusted Return on Equity (RoE) of 10.4%, down from 15.8% in the previous year, primarily due to higher refinancing rates and intensified competition. The company cited a weakening macroeconomic environment and increased delinquencies as contributing factors.

Outlook in a Dynamic Market

Mercedes-Benz’s outlook remains cautious due to regional economic differences and above-average inflation in many areas. The company expects global GDP to grow by only around 2.5% in 2023, with geopolitical uncertainties as an additional concern.

On the other hand, energy prices are anticipated to remain lower on average in 2023 than the previous year.

Final Thoughts

Overall, Mercedes-Benz Group AG continues to navigate a challenging market environment by delivering solid financial results. The company’s focus on electrification, safety, and financial resilience positions it well for future growth, even in a highly competitive EV market.

Tagged with: ,

About Author

Giancarlo Perlas

Giancarlo Perlas is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations, particularly in the blockchain and cryptocurrency sectors. Alongside his civic and corporate pursuits is his love for cars, particularly those made by Mercedes-Benz. In 2012, he found himself with like-minded individuals within BenzInsider. From then on, he used the platform as a way to share his passion with the automotive community. Follow his Facebook page at, X (formerly Twitter) @giancarloperlas, and IG @benzinsider. View all posts by Giancarlo Perlas →

Leave a Comment

Login to your account

Can't remember your Password ?

Register for this site!