Mercedes in crisis mode: profits collapse by 31%! What now?

Mercedes in crisis mode: profits collapse by 31%! What now?

Things are currently going haywire in the automotive industry. The Mercedes-Benz Group today announced its profit slump, which fell by a shocking 31% to 1.19 billion euros in the third quarter of 2025 compared to 2024. The operating result (EBIT) even fell by 70% to 750 million euros, which astonished some analysts. The main reasons for these catastrophic figures are the weak sales markets, new customs requirements, geopolitical tensions and negative exchange rate effects, which are really putting a strain on the industry, reports Leadersnet.

But the decline is not only due to Mercedes-Benz. The entire automotive sector is experiencing difficulties. According to n-tv, Mercedes' profit fell to 10.4 billion euros, a decline of 28%. There was a 7% decline in deliveries in China - the group's most important market - and 14% fewer sales in the luxury car segment. Revenue also fell by 4.5% to 145.6 billion euros. In short, things aren't getting any better: a further decline in sales and revenue is predicted for the current year.

The challenges are growing

The situation is not only sensitive for Mercedes-Benz. A comprehensive analysis by EY shows that German automobile manufacturers suffered a total profit decline of 38% in the first half of 2025 - which only increases the pressure on the industry. At a time when global conflicts and a weak economy are taking a toll on Europe, many companies are struggling with high transformation costs and weak sales of electric cars.

The question that arises from this: How does Mercedes-Benz want to deal with these challenges? CEO Ola Källenius has already announced that the company is sticking to its annual targets, including an adjusted return on sales of 4-6% for passenger cars. A share buyback program with a volume of up to 2 billion euros is also planned. With further investments in software, autonomous driving and battery technology, the path back to double-digit returns should be taken.

The future in sight

What is interesting is that sales of electrified vehicles increased by 22% compared to the previous quarter, and the share of these vehicles is now 21.8% in the passenger car sector. Nevertheless, overall sales of Mercedes-Benz Cars are declining – they fell by 12.3%. Despite this increase in xEV sales, the industry will continue to be unable to respond quickly to the profit slump and declining sales figures.

So while the Mercedes-Benz Group tries to assert itself in a turbulent market environment, it remains to be seen whether the strategic decisions will bear fruit. The coming months could be groundbreaking for the company and may decide whether it can stay ahead in the highly competitive luxury segment.