Quick Overview
- First-quarter net income decreased 17.2% year-over-year to €1.43 billion, while revenues declined 5% to €31.6 billion
- Chinese market sales plummeted 27% to 111,621 vehicles, contributing to a 6% overall volume decline
- American market sales surged 20% to 81,060 vehicles, providing partial relief from Asian market weakness
- Battery electric vehicle deliveries increased 9% to 44,258 units; plug-in hybrid sales contracted 20%
- Annual 2026 outlook remains unchanged, with EBIT projected significantly above 2025 performance
Mercedes-Benz kicked off 2026 on a challenging note, posting a 17.2% decline in first-quarter net income to €1.43 billion compared to €1.73 billion in the prior-year period. Revenues decreased 5% to €31.6 billion, though the figure marginally exceeded analyst projections.
Operating profit (EBIT) declined 17% to €1.90 billion. Adjusted EBIT experienced a more pronounced contraction of 30%, settling at €1.77 billion.
China represented the primary headwind. Deliveries in the automaker’s most significant individual market contracted 27% to 111,621 units. Management attributed the weakness to scheduled product transitions, broader economic headwinds, and intensifying competitive pressures.
Mercedes-Benz Group AG, MBG.DE
Across the broader Asian region, unit deliveries fell 24% to 152,662 vehicles. The downturn marks a significant setback for a luxury brand that has historically depended heavily on affluent Chinese consumers.
The Cars division bore the brunt of the decline, with operating profit plunging 54% to €809 million. Segment return on sales compressed to 3.5% from 7.3% in the corresponding quarter of 2025.
U.S. Market Strength and Vans Division Provide Bright Spots
Despite widespread challenges, several positive indicators emerged. The Vans business unit delivered robust results, with operating profit jumping 71% to €392 million, despite a modest 3% volume decrease.
American market car deliveries climbed 20% to 81,060 units, offering substantial offset to the Chinese market deterioration. CFO Harald Wilhelm emphasized that robust appetite for recently launched products and solid order backlogs position the company favorably for improved second-half performance.
All-electric vehicle deliveries expanded 9% to 44,258 units, representing 19.4% of total first-quarter sales. Plug-in hybrid volumes proved less resilient, dropping 20% to 37,079 units.
Overall first-quarter vehicle deliveries totaled 419,430 units, reflecting a 6% year-over-year contraction.
Financial Position and Investment Activity Remain Solid
Adjusted industrial free cash flow improved 18% to €2.84 billion. Industrial segment net liquidity advanced 5% to €33.81 billion from the 2025 year-end position.
Research and development expenditures contracted 3% to €2.25 billion, while capitalized development investments climbed 21% to €861 million. Capital expenditures on property and equipment rose 9% to €749 million.
Basic earnings per share decreased to €1.49 versus €1.74 in the year-ago quarter.
Regarding corporate developments, Mercedes-Benz executed agreements in April 2026 to divest the Athlon Group to BNP Paribas, with transaction completion anticipated during the year’s second half. The company also advanced its German “Own Retail” strategic initiative, disposing of six additional operations during the first quarter.
Mercedes-Benz maintained its full-year 2026 financial guidance, anticipating group revenues approximately level with the previous year and operating profit substantially exceeding the 2025 result.
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