🚗 Mercedes-Benz announces bad results: profit down, lower sales and pressure on electric cars!

Mercedes-Benz $MBG.DE announced results for 2024 that didn't please too much. Profit dropped by 28 % to 10.4 billion euros, mainly due to lower sales in the key markets of Germany and China. The carmaker is now trying to adapt to the new reality and plans to cut costs by 2027 by 10 %, while focusing on new models and a more efficient electric vehicle strategy.

📉 Key financial indicators:
Net profit: €10.4 billion (-28% year-on-year)

Sales: EUR 145.6 billion (-4.5%)

Vehicle sales: 1.98 million (-below expectations of 2 million vehicles)

Operating margin: 8.1% (vs. 12.6% in 2023)

Earnings before interest and taxes (EBIT): €13.6 billion (-almost a third)

✅ Positive news:
EUR 5 billion share buyback - signals confidence in future growth.

Dividend EUR 4.30 per share, although lower than last year's EUR 5.30.

Investing in innovation - New models, more efficient production and reduced costs for electric vehicles.

🌍 What's behind the drop in profits?
Weaker sales in China and Germany - Mercedes' key markets are facing weakened demand, especially in the premium segment.

Pressure on electric vehicles - Customers are still hesitant to switch to EVs while competition is intensifying.

Regulatory costs - meeting emissions standards CO₂ emissions will cost hundreds of millions of euros.

🔮 Mercedes response
Reducing costs by 10 % by 2027 - more efficient production and supply chain optimisation.

Focus on electromobility - New EV models with a better pricing strategy.

Disciplined pricing strategy - Less reliance on discounts, more focus on profitability.

Dividend growth and share buybacks - Despite lower profits, the company wants to maintain an attractive return on capital.

⚠️ Challenges facing the company and the automotive industry as a whole:
Competition in China - domestic automakers are offering aggressive pricing and technological improvements.

Profitability of electric vehicles -EVs are not yet as profitable as internal combustion engines.

What do you think of Mercedes and the European car industry, do you still give it a chance?