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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] Mercedes-Benz Group in Germany has reported a significant decline in operating profit, which has fallen by nearly half compared to the previous year, primarily due to weakened consumer sentiment in China.
According to the company's earnings report released on the 25th (local time), the operating profit before interest and taxes (EBIT) for Q3 was €2.517 billion (approximately ₩3.78 trillion), down from €4.842 billion (approximately ₩7.28 trillion) in Q3 of last year, marking a 48% decrease. Revenue also declined by 6.7%, from €37.01 billion (approximately ₩55.65 trillion) to €34.528 billion (approximately ₩51.94 trillion).
Notably, the EBIT for its core passenger car segment plummeted by 63.8%, from €3.312 billion (approximately ₩4.98 trillion) to €1.198 billion (approximately ₩1.8 trillion). Harald Wilhelm, the CFO, acknowledged the challenges but stated, "We have generated solid cash flow during these tough times," adding that the Q3 results did not meet their expectations. On the Frankfurt stock exchange, Mercedes-Benz shares fell by about 3% compared to the previous day's closing price, marking a 22% decline over the past six months.
The decline in consumer sentiment in both China and Germany has hit Mercedes-Benz hard, particularly as the brand has a strong focus on luxury sedans. According to the economic news outlet Handelsblatt, the delivery volume of the Maybach, Mercedes' premium sedan, dropped by 56% in China over the past year. The report noted, "China has been Mercedes' largest market and key to its luxury strategy in recent years, but the consumer sentiment among Chinese entrepreneurs and high-income professionals has weakened. Many in the middle class have failed in real estate investments and are holding onto cash."
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
