Mercedes-Benz has cut its core profit forecast for 2026, now expected to be stable at 5.8 billion euros, rather than the estimated 15% growth. According to Euronews, Tuesday's decision is motivated by difficult conditions in the Chinese market and rising costs, highlighting a severe structural crisis for the German automotive industry.

The profit margin for the core automotive business has been reduced to 2-3%, compared to the previous 3-5%. Preliminary core profit for the third quarter was 1.77 billion euros, with a 2.5% margin in the auto division. The announcement caused a drop of over 4% in the manufacturer's shares.

This trend reflects a situation involving other German manufacturers. BMW and Volkswagen have also lowered their forecasts, due to weak demand and strong competition from Chinese rivals such as BYD and Xiaomi. Mercedes-Benz deliveries in China fell by 29% in the first nine months of 2026.

CEO Ola Kallenius has invited German employees to work unpaid extra hours, expanding production in Hungary where costs are 70% lower than in Germany. Volkswagen, meanwhile, plans to cut 120,000 jobs globally by the end of the decade.