Mercedes-Benz Shares Rise on Stable Q2 Profit Amid Cost Cuts
Shares in Mercedes-Benz rose after the company reported stable second-quarter profit, driven by cost reductions. Despite a revenue decline and challenges from Chinese competitors, particularly in its core China market where car sales dropped sharply, Mercedes maintained its guidance for its automotive business with an adjusted return on sales of 4%. The performance offered some relief to investors in Germany's struggling auto sector. Mercedes' operating profit increased by 22% year-on-year to €1.5 billion, supported by savings from administrative and R&D expenses as well as gains from the planned sale of its leasing subsidiary Athlon. However, CFO Harald Wilhelm noted that full-year margins are expected at the lower end due to higher production costs for electric vehicles in Europe. The company is also accelerating cost-cutting measures in Germany while expanding manufacturing capacity in Eastern European countries like Hungary and Poland. Chinese automakers, which have already weakened Mercedes' position in China, are now increasing their presence in Europe, raising concerns about long-term competitiveness.
Tickers: $MBGAF
Topics: automotive China market cost cuts profit report