Mercedes-Benz stock faces China pressure after mixed Q3

Mercedes-Benz Group reported a mixed third quarter on October 28, 2026, with profit benefiting from a weak prior-year comparison while China weighed on sales and core-car margins. The company lowered its 2026 outlook before the results, citing a sharper downturn in China and higher fourth-quarter costs, according to Yahoo Finance.

Mercedes-Benz stock traded at 40.96 euros on Lang & Schwarz at 09:48:35 CEST on Friday, October 30, 2026, 0.49 percent above the Xetra close of Thursday, October 29, at 40.76 euros. The quote was supplied by the Lang & Schwarz market feed.

China weakness resets the outlook

Third-quarter revenue fell 4.5 percent year over year to 30.7 billion euros from 32.15 billion euros. Net profit rose 28 percent to 1.52 billion euros, while EBIT increased to 1.77 billion euros from 750 million euros. The improvement was helped by restructuring and legal costs that had weighed on the comparable quarter.

The Cars division remained the main pressure point. Sales fell 8 percent to 407,000 vehicles, with China deliveries down 31 percent. Sales outside China increased 1 percent, including growth of 5 percent in Europe and 6 percent in the United States, while fully electric passenger-car sales rose by about 60 percent.

Cars adjusted EBIT declined to 560 million euros, and adjusted return on sales narrowed to 2.5 percent from 4.8 percent a year earlier. Higher inventory ahead of new-model launches also pushed Cars cash flow to negative 200 million euros in the quarter.

Vans and finance services provide support

The group result was supported by businesses outside passenger cars. Vans sales were stable at about 84,000 units, with adjusted EBIT of about 400 million euros and an adjusted return on sales of 9.4 percent. Financial Services increased adjusted EBIT by 42 percent to about 450 million euros, according to the Investing.com earnings-call transcript.

For 2026, Mercedes-Benz now expects Cars adjusted return on sales of 2 percent to 3 percent, compared with the previous 3 percent to 5 percent range. Group EBIT is expected at the prior-year level, while industrial free cash flow is forecast to be significantly below the prior year. Group revenue is still expected to be slightly below 2025.

Chief Executive Ola Källenius said China remains a strategic pillar, despite the downturn. The company is reviewing its brand, products, sourcing, production and technology footprint, with a more comprehensive strategy planned for early 2027. Mercedes-Benz intends to source almost everything in China for Chinese production from the electric E-Class planned for the second half of 2027.

What investors should watch next

Management expects fourth-quarter Cars profitability to be near break-even, while vehicle sales should exceed the third quarter but remain below the prior-year level because of China. The company also expects working capital to improve as inventory built for new launches is sold.

Mercedes-Benz stock remains tied to the execution of its product offensive, the pace of cost reductions and the durability of demand in Europe and the United States. The key uncertainty is whether the China review can stabilize profitability without sacrificing the brand's pricing position.

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