Mercedes Q1 2026 Results: Automotive EBIT Falls Nearly 50% to €933m
Mercedes Q1 2026 results: automotive EBIT fell 47.2% to €933m as deliveries dropped and China sales plunged 27%; management still expects improvement in H2 later.
The Mercedes Q1 2026 results show a sharp decline in profitability at the carmaker’s automotive division, with adjusted operating profit plunging by nearly half to €933 million. Revenue slipped about 5.3% to roughly €23 billion, leaving an operating margin of 4.1% amid weaker deliveries and a pronounced sales slump in China. Management signalled confidence that new models and robust order books will support a recovery in the second half of the year.
Automotive EBIT Drops 47.2% to €933 million
The automotive arm’s adjusted EBIT fell 47.2% year‑on‑year to €933 million in the first quarter, a decline driven by lower volumes and margin pressure. Reported revenue for the unit declined by 5.3% to roughly €23 billion, translating to an operating margin of 4.1%. Company executives described the result as in line with expectations and within the previously stated margin corridor of 3–5%.
Sales and Deliveries Decline Amid China Slump
Deliveries to dealers in the quarter totaled fewer than 420,000 vehicles, a drop of about 6% from the already weak prior‑year quarter. The company said China—its largest single market—was the hardest hit, with local sales down 27% as intense competition and muted demand weighed on volumes. Management attributed a significant portion of the earnings setback to that regional weakness and a less favourable product mix.
Model Offensive Still to Reach Customers
Mercedes has framed 2026 as a year of transformation, but the much‑promoted model offensive has not yet had a meaningful impact on sales or margins. Executives note that many of the new vehicles are still rolling into production and are expected to reach customers in the coming months. The company is banking on the pipeline of launches to improve sales momentum and lift profitability in the second half of the year.
China Strategy Focuses on Localised Electric Models
At Auto China 2026 Mercedes showcased a long‑wheelbase version of the fully electric GLC, positioning it as part of a China‑specific product push. The group said the GLC LWB EV is the first of a new generation of models designed to meet local market preferences, with further China‑tailored launches planned for the second half. Management highlighted those new entries as central to regaining share in the highly competitive Chinese EV sector.
Management Maintains Guidance and Cites Order Books
Despite the disappointing first quarter, CFO Harald Wilhelm emphasised that the company remains on course to meet its full‑year guidance and that the 4.1% margin sits within the expected 3–5% range. Wilhelm pointed to strong demand for upcoming products and “well‑filled order books” as the basis for expecting greater dynamism later in the year. The firm framed the quarter as a transitional period ahead of the anticipated commercial benefits of its new models.
The results underscore the tightrope Mercedes faces as it balances heavy investment in electrification and new product development with near‑term margin pressures from softer demand and fierce competition. While management’s confidence in a second‑half rebound hinges on successful launches and a recovery in China, the Q1 figures make clear that the group’s path to improved profitability will depend on execution and market reception of the new vehicles.
