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# Mercedes-Benz deliveries in China fell another 29%, and now its forecast for the year has gone with them
- URL: https://www.businessbagel.com/mercedes-benz-deliveries-in-china-fell-another-29-and-now-its-forecast-for-the-whole-year-has-gone-with-them/
- Published: 2026-10-29T02:45:00.000Z
- Updated: 2026-10-29T02:45:00.000Z
- Description: Mercedes-Benz has cut its 2026 forecast, blaming China and costlier raw materials, and now expects group profit to do no better than match last year's.
- Author: Christian Maidman
- Tags: Companies, Business Bagel News

Mercedes-Benz has been selling fewer cars in China for some time, and on Tuesday it stopped expecting the rest of 2026 to make up for it. Volkswagen and BMW had already lowered their sights for the year, and Mercedes is now the third of Germany's big carmakers to follow. Its shares fell 4.2% on the news.

## What the new forecast says

The car business is where it shows. Mercedes now expects to keep 2 to 3 cents of adjusted profit from every euro of car sales, down from the 3 to 5 cents it had pencilled in.

For the group as a whole, core profit, the earnings before interest and tax that carmakers give guidance on, is now expected to come in level with last year's 5.8 billion euros, about R108 billion, rather than rise by at least 15%. In the third quarter alone, the car business kept just 2.5 cents in the euro.

The cut runs through the rest of the guidance too. Free cash flow from the industrial business, the cash left after running costs and investment, is now expected to land significantly below last year's, and van sales flat rather than slightly up. Mercedes gives two reasons: a harder market in China, and higher costs in the final quarter for raw materials and for what it calls product lifecycle measures.

## China, where it keeps going backwards

China is the world's biggest car market, and Mercedes has been shrinking in it. Over the first nine months of the year its deliveries there dropped another 29%, and last year's total was already the weakest since 2016.

Chinese brands are doing much of the damage. AFP reports that sluggish demand and cut-throat competition from local rivals such as BYD and Xiaomi have eaten into German carmakers' profits, which is why Volkswagen and BMW cut their forecasts first.

Back in Germany, chief executive Ola Källenius has turned to costs. He has urged German workers to put in extra hours without pay, while expanding the company's factories in Hungary, where he says costs are about 70% lower than at home.

The lower forecast is now the official one, revised alongside Mercedes' third-quarter interim report, and it covers a final quarter the company already expects to cost more.