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Mercedes reports solid profits from cost cuts
Mercedes-Benz achieved strong profits in the second quarter of 2026, despite a decline in deliveries due to the market slowdown in China and eroding consumer confidence resulting from the downturn in the real estate market. The adjusted return on sales in the automotive division was 4%, surpassing analyst expectations of a larger decline, thanks to the company's efforts to reduce costs and cut back on development spending, along with solid performance from the financial services division. Mercedes maintained its profit margin outlook for the auto industry between 3% and 5% for 2026, despite falling sales and revenues, especially in China where vehicle sales dropped by 30%. The company's shares increased by 3.6% after rising earlier by 5.9%, but remain more than 50% below their levels at the start of the year. The CEO continues to emphasize cost-cutting to support returns amid a challenging environment, heavily reliant on wealthy buyers as demand in China declines.
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