German Automaker Mercedes-Benz Group Cuts Full-Year 2026 Guidance, Lowering Passenger Car Margin Outlook to 2-3%
Mercedes-Benz Group issued an ad-hoc announcement before its Q3 earnings, cutting its full-year guidance for the passenger car division's adjusted sales return on revenue from 3-5% to 2-3%. The EBIT outlook was revised to 'flat' versus last year, citing intense competition in China and rising material costs in Q4.
German automaker Mercedes-Benz Group AG lowered its full-year 2026 financial forecast in an ad-hoc announcement just before releasing its third-quarter results. According to reporting by TechNews, the company originally projected an adjusted Return on Sales (RoS) of 3% to 5% for its passenger car division but has now cut this expectation to 2% to 3%. Additionally, the outlook for Earnings Before Interest and Taxes (EBIT) was revised from "better than last year" to "in line with last year."
The primary drivers for this downgrade were identified as intensifying competition in the Chinese market and anticipated sharp increases in material costs during the fourth quarter. While the new guidance is more conservative than previous estimates, the report notes it remains slightly above some analyst consensus figures. Notably, the group's Industrial Business cash flow forecast stands at €172 million, significantly below the market expectation of €420 million.
In contrast, the commercial vehicle division remained resilient, maintaining a sales return on revenue of 9.4%. This suggests that the slower adoption of electric vehicles and mature service networks for internal combustion engines have shielded this sector from similar pressures. Despite the challenges, Mercedes-Benz expects full-year EBIT to reach €1.77 billion, a substantial improvement over last year's €580 million and better than 2024 performance. This indicates that after heavy investments in the MB.OS operating system and new electric platforms, the company has stopped the bleeding, though the profit landscape remains precarious amid price wars in China's luxury segment.