In Difficulty, Mercedes-Benz Sees Its Turnover Fall By 4.5% In 2024

The year 2024 has been a difficult year for Mercedes-Benz. Between the slowdown in demand for electric vehicles, the stagnation of the Chinese market, the crisis in the luxury sector and the difficulties of the German industry as a whole, the car manufacturer is showing a sharp decline in annual results. The German manufacturer, which published its figures for last year on Thursday morning, posted a net profit of 10.41 billion euros, a fall of 28.4% compared with the previous financial year.

Overall sales also fell, reaching 145.6 billion euros, down 4.5% on the previous year. These results are largely attributable to the drop in deliveries, which fell by 4%, with a particularly sharp fall of 14% for luxury models.

In recent years, Mercedes-Benz has focused on marketing its most prestigious models, an approach that now seems to have reached its limits. An analysis by Deutsche Bank highlights that the manufacturer's prices are excessive compared to those of the competition, which could explain the disaffection of customers.

At the same time, the plan for a fully electric transition by 2030 is being called into question. In 2024, deliveries of electric vehicles fell by 23%, with only 185,000 units sold worldwide, a figure well below that of its rival BMW, which sold more than double that amount.

The electric car market is facing a general slowdown after several years of sustained growth. The end of certain government subsidies, the rise in interest rates hampering purchasing power and difficulties in the supply of raw materials have led to a sharp drop in sales. In addition, the still limited range of certain models and the lack of recharging infrastructure in several regions continue to hold back consumers in their transition to electric.

Faced with this situation, Ola Källenius, CEO of Mercedes-Benz and president of ACEA (European Automobile Manufacturers' Association), recently called on the European Union to ensure that the institutions do not impose the fines planned against manufacturers who fail to meet the ecological targets - in particular the reduction of polluting emissions - for the current year.

Another cause for concern is China, the world's largest automobile market, where Mercedes-Benz sales have fallen by 7%. In a context of economic slowdown and increased competition with local manufacturers, the German brand is struggling to maintain its appeal.

To counter these difficulties, Mercedes-Benz now plans to reduce production costs by 10% by 2027. For the time being, no possible job cuts have been mentioned.

In Germany, the situation remains tense for the automotive sector. Persistent inflation and the sudden removal of government subsidies for the purchase of electric vehicles have discouraged many consumers. In the country, the market share of electric vehicles has fallen to 13.5% of total vehicle sales, after approaching 19% in 2023. Over the whole of 2024, 381,000 electric vehicles were registered there, an annual drop of 27.4% after five years of robust growth, according to the federal automobile agency KBA.

This economic situation is weighing on the industry as a whole and could slow down the ecological transition so desired by the public authorities.