Mercedes-Benz on Thursday forecast lower returns on sales in 2024 in its cars and vans division, warning of the “exceptional” uncertainty caused by conflict in the Middle East and Russia/Ukraine and tensions between China and the US.
Supply chain bottlenecks for critical components remained “a significant risk factor”, Mercedes-Benz said.
The potential for an “even more pronounced slowdown in economic growth” could also have an affect on automotive markets, it added.
The luxury carmaker reported an adjusted return on sales in its car division of 12.6% for 2023, in line with its forecast, as inflation and supply chain-related costs as well as component shortages ate into its profits.
For 2024, it expected a lower adjusted return of 10%-12% for cars and 12%-14% for vans, down from last year's 15.1%.
Over the course of 2023, the carmaker warned of supply snags and inflation weighing on sales, with price wars, particularly in the electric vehicle (EV) segment, placing pressure on margins.
Mercedes-Benz, the first of Germany's three top carmakers to report 2023 results, was expected to have the highest returns margin, in part due to its strategy of passing higher costs to customers.
The luxury carmaker raised its average price by 2% to €74,200 (R1,516,452) and increased spending on research and development for future technologies such as its MB.OS platform.
Group earnings before interest and taxes fell to €19.7bn (R403.2bn) from €20.5bn (R419.6bn) last year despite a 2% rise in revenue.
Mercedes-Benz warns geopolitics, trade tensions to weigh in 2024
Image: Supplied
Mercedes-Benz on Thursday forecast lower returns on sales in 2024 in its cars and vans division, warning of the “exceptional” uncertainty caused by conflict in the Middle East and Russia/Ukraine and tensions between China and the US.
Supply chain bottlenecks for critical components remained “a significant risk factor”, Mercedes-Benz said.
The potential for an “even more pronounced slowdown in economic growth” could also have an affect on automotive markets, it added.
The luxury carmaker reported an adjusted return on sales in its car division of 12.6% for 2023, in line with its forecast, as inflation and supply chain-related costs as well as component shortages ate into its profits.
For 2024, it expected a lower adjusted return of 10%-12% for cars and 12%-14% for vans, down from last year's 15.1%.
Over the course of 2023, the carmaker warned of supply snags and inflation weighing on sales, with price wars, particularly in the electric vehicle (EV) segment, placing pressure on margins.
Mercedes-Benz, the first of Germany's three top carmakers to report 2023 results, was expected to have the highest returns margin, in part due to its strategy of passing higher costs to customers.
The luxury carmaker raised its average price by 2% to €74,200 (R1,516,452) and increased spending on research and development for future technologies such as its MB.OS platform.
Group earnings before interest and taxes fell to €19.7bn (R403.2bn) from €20.5bn (R419.6bn) last year despite a 2% rise in revenue.
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