Mercedez Benz shares plunge as inflation punishes profits
Mercedez Benz shares plunged over six per cent today after it said profits had fallen due to a slowdown in vehicle deliveries and supply chain issues.
Adjusted earnings shrunk eight per cent to €4.9bn (£4.27bn) in the first nine months of the year, with net profit also falling seven per cent to €3.7bn.
The luxury carmaker offloaded just under 20,000 fewer cars than the prior year, with total car sales coming in at 510,564. Revenues levelled out year-on-year at €37.2bn.
The weaker performance was largely down to a “significant decline” in Mercedes Benz’s car segment, which more than offset a bullish performance from its van division.
Supply bottlenecks, higher costs and “negative” exchange rate developments saw adjusted earnings in the subsidiary fall by nearly a fifth to €3.36bn.
The Stuttgart-based group maintained its outlook for the year ahead, with revenues and operating profit expected to come in unchanged.
It comes as competition in the European electric vehicle (EV) market hots up, with Chinese competitors and Tesla’s aggressive price cuts threatening to derail traditional automakers.
The marque said all-electric makes’ share of total Mercedez sales had “increased significantly,” rising five per cent on the prior year.
But Harald Wilhelm, Chief Financial Officer, told reporters this morning that the EV market had become a “brutal space,” according to Reuters, with warning shots fired over cut-throat prices across Europe.
Shares in the company are down over nine per cent in the year to date.