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That 2024 would be a transition year for the car had been widely predicted. The results of the first three months are putting it in black and white. Mercedes-Benz Group’s adjusted operating profit fell sharply to 3.6 billion versus 5.4 billion in 2023 (-33.6%) in the first quarter, as a result of model turnover in Asia and weak vehicle demand electrical. Earnings per share fell 22.5% to 2.86 versus 3.69 a year ago.
The company left its forecast for the year unchanged, but said its margin in the automotive sector was 9%, lower than its annual target and importantly well below the result of a year ago (14.8%).
The German luxury car maker has run into trouble with its strategy to shore up profits by selling more high-end cars. In the first three months of the year, sales weakened for some of its best-selling models, including the G-Class off-roader and E-Class sedans, as consumers waited for the release of new or updated versions of the vehicles.
The house of the three-pointed star has seen orders for fully electric models slow down. In February, the company recalibrated its sales targets, forecasting that the share of battery-electric vehicles (BEVs) and plug-in hybrids will remain broadly stable in 2024, at between 19% and 21% of overall sales.
Mercedes said its prices remained at a high level in the first quarter, despite pressure from price cuts led by Tesla. The company added that it wants to “maintain and defend” prices at current levels.