Mercedes-Benz trims 2024 core profit outlook again after China sales fall
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FRANKFURT Sept 19 (Reuters) -Mercedes-Benz MBGn.DE on Thursday cut its full-year profit margin for the second time in less than two months, afteroverall sales volume fell in China.
The ongoing weakness of the Chinese market for luxury cars prompted theStuttgart carmaker to trim its outlook after having already done so asrecently as July.
Frankfurt-listed shares in Mercedes-Benz MBGn.F were 3.4% lower on the news.
With GDP growth in China losing momentum due to weaker consumption as well as a continued downturn in the real estate sector, the company adjusted its earnings outlook for 2024 for both Mercedes-Benz Cars and the Mercedes-Benz Group.
Mercedes-Benz Cars now expects an adjusted return on sales to be between 7.5% and 8.5% from 10% to 11% previously, implying an expected adjusted return on sales of around 6% for the second half of the year.
As a result, Mercedes-Benz Group's earnings before interest and taxes (EBIT) are now expected to be significantly below last year's level, and free cash flow for the group's industrial business is also expected to be significantly less than the previous year's level.
Last week BMWalso flagged ongoing muted demand in China affecting sales in the country, adding to thegroup of automakers facing difficulties in the world's second-biggest economy, which is also the world's largest auto market.
Reporting by Shivani Tanna in Bengaluru and Emma-Victoria Farr in Frankfurt; Editing by Shounak Dasgupta and Deepa Babington
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