Mercedes-Benz’s third-quarter earnings have significantly slumped, sparking renewed scrutiny of the automaker’s ambitious investment strategy and its vulnerability to global economic headwinds. The company reported a consolidated result of just €1.19 billion, a considerable drop from the €1.719 billion recorded in the same period last year.
While CEO Ola Källenius framed the results as consistent with the company’s full-year projections, attributing them to an ongoing “largest product and technology offensive in the company’s history” the figures are fueling debate about the sustainability of Mercedes-Benz’s aggressive expansion plans. The adjusted EBIT for the Mercedes-Benz Group also saw a decline, reaching €2.099 billion compared to €2.537 billion in the third quarter of 2023.
The downturn is attributed primarily to a diminished sales volume coupled with escalating costs related to tariffs and currency exchange fluctuations. A crucial element of the reported results involves substantial one-off effects totaling €1.349 billion. The bulk of this-€876 million-is directly linked to redundancy programs in Germany and broader “optimization programs” implemented overseas. This substantial cost of personnel reduction highlights the internal restructuring underway and raises concerns about the potential impact on long-term productivity and innovation.
Analysts are questioning whether the company’s heavy investment in electric vehicles, digital technologies and new mobility services is delivering a commensurate return. While Källenius maintains confidence in the overall strategy, the dip in profitability adds pressure to justify continued investment in a rapidly evolving automotive landscape. The reliance on one-off effects to present a potentially more palatable financial picture also invites criticism regarding the true health of Mercedes-Benz’s core operations in a challenging global economic environment. The reported figures underscore a broader trend within the automotive industry – the escalating costs and risks associated with transitioning to a new era of mobility.