Dive Brief:
- Mercedes-Benz reported a Q1 profit of 3.9 billion euros, down roughly 30% from 5.5 billion euros ($5.9 billion) in Q1 2023, according to an April 30 press release.
- Revenue for the company’s cars segment was down 7.5%, from 27.8 billion euros to 25.7 euros, as sales declined 8% year over year from about 503,500 to 463,000 vehicles.
- During an earnings call, CFO Harald Wilhelm referred to Q1 as the trough, noting the automaker expects volumes to go up with continued momentum from new products in the second half of the year.
Dive Insight:
Wilhelm said sales at Mercedes-Benz’s cars division were impacted by supply constraints, product transitioning and market dynamics, leading to a 9% adjusted return on sales in Q1 compared to nearly 15% in Q1 2023.
“I can say very clearly, I mean, I’m not happy with the 9% in the first quarter,” Wilhelm said during the call, noting the automaker is placing a lot of emphasis on improving that figure.
Despite what it called a “demanding environment” in Q1, Mercedes-Benz affirmed its full-year guidance of 10% to 12% return on sales for its cars division. Wilhelm said the company anticipates volumes to increase in the next quarter, mix to improve in the second half of the year and raw materials to create tailwinds.
“At the same time, we see supply chain-related costs generating further headwinds,” he said.
Mercedes-Benz highlighted that the electric vehicle adoption rate has slowed across the industry. In the transition from ICE to battery electric vehicles, the automaker expects that its plug-in hybrids will play an important role, according to its earnings release.
Of its total Q1 volume, Mercedes-Benz sold 90,177 EVs, down 1.7% from 91,698 in Q1 2023.
