Mercedes-Benz Buyback Rolls On as Record EV Demand Collides With a 31% China Slump
Published on 10/10/2026 at 15:02 | Editorial boerse-global.de
Mercedes-Benz is leaning on its own balance sheet while its biggest single market wobbles. The Stuttgart automaker confirmed on Monday that it repurchased another 875,000 of its own shares in the week through October 2, lifting the cumulative total under the program launched in early September to 3,851,805 shares. The steady buying gives investors a dependable source of demand during trading hours, and by retiring stock it shrinks the pool of outstanding shares — a move that can flatter future per-share metrics on paper.
The timing matters, because the operating picture is split cleanly in two.
Europe's order books versus China's retreat
Worldwide, Mercedes moved 491,700 passenger cars and vans in the third quarter, a 6% decline from the same period a year earlier. Battery-electric deliveries, however, jumped 52%. Demand in Europe for the electric versions of the CLA, GLC, GLB and GLA is strong enough that those variants are sold out for the remainder of the year, with order books stretching well into the next year. New compact model lines are drawing noticeable customer interest.
China tells the opposite story. Sales there collapsed 31% to 86,800 passenger cars, according to the quarterly delivery report. That drop lands at an awkward moment, just ahead of the earnings release, and it raises the question of how deeply the volume loss in Asia will cut into the group's financial base. For years the Chinese market delivered above-average contribution margins for the luxury segment; losing that volume reshapes the economics of the entire model portfolio.
Why the mix matters more than the headline
The number that will decide the coming months is the operating margin in the car business. Mercedes-Benz Cars — the passenger-car division — saw deliveries fall 8% to 407,200 vehicles, a steeper decline than at group level. Chinese demand has traditionally skewed toward high-margin upper-class sedans, so their absence feeds straight through to group earnings. Whether the company can offset Asia with steadier business elsewhere is now the central test.
Should investors sell immediately? Or is it worth buying Mercedes-Benz?
Analyst Patrick Hummel of Swiss bank UBS flagged the mounting headwind from Chinese rivals on Tuesday, cutting his price target to EUR 45 from EUR 50 and rating the stock Neutral. Local competition in China is no longer confined to the volume segment — it is increasingly reaching into premium classes. Investors will be watching closely whether Mercedes can hold its pricing discipline. If discounts become necessary to defend market share, profitability targets come under immediate threat.
Cost cuts and capital discipline as ballast
Management is working the other side of the ledger. A voluntary severance program for employees in indirect functions in Germany has been relaunched, with the personnel restructuring set to begin in December 2026 to bring down the cost base over the long term. Alongside that, the company is prioritizing capital discipline and supporting its own stock.
The bull case rests on those operational levers plus the electrification momentum. If the 61% surge in fully electric passenger cars — a new quarterly record for the Stuttgart manufacturer — can be sustained, the model-program transformation could advance faster than previously expected. The 52% figure cited for battery-electric deliveries reflects the same underlying strength in the numbers.
The bear case: pricing power and capital intensity
Against that stands a concrete downside risk. Should the Chinese slump prove more than a temporary soft patch, a lasting loss of pricing power looms. Domestic competitors are gaining ground rapidly in the premium segment and forcing foreign manufacturers into concessions. At the same time, the technological ramp-up remains capital-hungry: electric vehicles at many manufacturers still do not generate the same margins as established combustion-engine models. If scale effects in battery cars cannot be converted into cash quickly, a prolonged margin dilution threatens.
Add the risk of broader demand weakness in Europe and North America, and a simultaneous slowdown across several core markets would sharply narrow the room for countermeasures.
Where the stock stands
The shares ended Friday at EUR 39.73. On the prior Thursday they had touched a new 52-week low of EUR 38.90, before rebounding 1.3% in the following session. Year-to-date the stock is down 34%. As long as the quote holds above that recent low, investors have a shot at stabilizing at a depressed level; a slide below it would likely trigger further selling pressure if earnings expectations have to be revised downward.
The next hard data point is already circled: on October 28, 2026, Mercedes-Benz Group AG publishes its interim report for the third quarter. Management held a pre-close call on Thursday to prepare investors and analysts for the numbers, and the analyst conference that follows the release will force the leadership to spell out exactly how deep the delivery dent has cut into earnings.
Ad
Mercedes-Benz Stock: New Analysis - 10 October
Fresh Mercedes-Benz information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
