Key Highlights
- First quarter earnings declined 17.2% year-over-year to €1.43 billion, while revenues decreased 5% to €31.6 billion
- Chinese market deliveries plummeted 27% to 111,621 vehicles, contributing to a 6% overall volume decline
- American market deliveries surged 20% to 81,060 vehicles, providing partial relief from Asian weakness
- Battery electric vehicle deliveries increased 9% to 44,258 units; plug-in hybrid sales contracted 20%
- Company reaffirms full-year 2026 outlook, anticipating EBIT substantially above 2025 performance
Mercedes-Benz kicked off 2026 on a challenging note, posting a first-quarter net profit of €1.43 billion—a 17.2% decline from the €1.73 billion recorded in the prior-year period. Revenues decreased 5% to €31.6 billion, though the figure marginally exceeded analyst forecasts.
Operating profit (EBIT) contracted 17% to €1.90 billion. The adjusted EBIT figure painted an even more concerning picture, plunging 30% to €1.77 billion.
The primary culprit? A significant deterioration in China. Deliveries in the automaker’s most critical individual market tumbled 27% to 111,621 units. Management attributed the decline to scheduled product transitions, broader economic headwinds, and intensifying competitive pressures.
Mercedes-Benz Group AG, MBG.DE
Across the broader Asian region, unit deliveries fell 24% to 152,662 vehicles. The downturn represents a significant setback for a luxury marque historically dependent on affluent Chinese consumers.
The passenger Cars division bore the brunt of the weakness, with operating profit cratering 54% to €809 million. The segment’s return on sales deteriorated to 3.5%, down sharply from 7.3% in the comparable 2025 quarter.
Bright Spots: Van Division and American Market Strength
Despite widespread challenges, certain areas demonstrated resilience. The Vans business unit delivered an impressive performance, with EBIT jumping 71% to €392 million, even as unit volumes dipped 3%.
The American market emerged as a crucial bright spot, with passenger car deliveries climbing 20% to 81,060 units—offering meaningful offset to the Asian deterioration. CFO Harald Wilhelm emphasized that robust appetite for recently launched products and healthy backlog levels position the organization for improved performance in the latter half of 2026.
Fully electric vehicle deliveries expanded 9% to 44,258 units, representing 19.4% of total first-quarter deliveries. Conversely, plug-in hybrid volumes suffered, declining 20% to 37,079 units.
Total first-quarter deliveries reached 419,430 vehicles, representing a 6% year-over-year contraction.
Financial Position Remains Solid Despite Headwinds
Adjusted industrial free cash flow showed improvement, rising 18% to €2.84 billion. Net industrial liquidity increased 5% to €33.81 billion compared to the 2025 fiscal year-end position.
Research and development expenditures declined 3% to €2.25 billion, while capitalized development investments rose 21% to €861 million. Capital expenditures on property and equipment increased 9% to €749 million.
Basic earnings per share came in at €1.49, compared to €1.74 in the year-ago quarter.
On the corporate development front, Mercedes-Benz executed agreements in April 2026 to divest the Athlon Group to BNP Paribas, with transaction completion anticipated during the second half of the year. The organization also advanced its “Own Retail” restructuring initiative in Germany, disposing of six additional operations during the first quarter.
Mercedes-Benz maintained its full-year 2026 financial guidance, forecasting group revenues approximately in line with 2025 levels and operating profit substantially exceeding the prior year’s performance.
