German automaker Mercedes-Benz reported that it experienced both stagnant growth and profitability last year due to a decline in sales volume.
On the 20th (local time), Benz announced in its earnings report that its earnings before interest and taxes (EBIT) last year were 13.6 billion euros (20.4 trillion KRW), a 30.8% decrease from 19.7 billion euros (29.5 trillion KRW) in 2023.
Sales also fell by 4.5%, from 152.4 billion euros (228.9 trillion KRW) to 145.6 billion euros (218.6 trillion KRW).
Operating profit in the passenger car segment, excluding vans and mobility services, decreased by 39.1%. Mercedes-Benz, which has a high proportion of luxury sedans, saw its sales in China drop by 17% last year, resulting in total sales of only 1.983 million units.
The operating profit margin for the passenger car segment fell from 12.6% in 2023 to 8.1% last year. Benz had already revised its forecasts downward twice last year and announced plans to reduce production costs by 5 billion euros (7.5 trillion KRW) by 2027 to improve profit margins.
Mercedes-Benz expects sales to remain below 2 million units this year, with the passenger car operating profit margin staying between 6% and 8%. However, it anticipates that strengthening its lineup, including a major redesign of the S-Class next year, will have a positive impact on sales growth.
Ola K?llenius, CEO of Mercedes-Benz, stated during the earnings conference call that from this year through 2027, the company plans to launch 19 new internal combustion engine models and 17 new electric vehicles.
This has been interpreted as a sign that automakers are refocusing on internal combustion vehicles amid sluggish electric vehicle sales. Earlier this month, Porsche, Volkswagen’s sports car brand, also announced plans to strengthen its internal combustion and hybrid vehicle offerings.
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