Mercedes-Benz Expands Electric GLC Assembly in India as Strike Hits Sprinter Plant and Margin Questions Linger
Published on 11/06/2026 at 08:01 | Editorial boerse-global.de
Mercedes-Benz has opened a second front in the global assembly of its electric GLC, kicking off CKD production at its Chakan plant near Pune from imported kits. The move follows the Thonburi Automotive Assembly Plant in Thailand and widens the model's manufacturing footprint — though whether it translates into profit is a separate question, and one investors are asking with growing urgency.
The backdrop is hardly comfortable. IG Metall extended its warning strikes across North Rhine-Westphalia on Tuesday, with the Mercedes-Benz plant in Düsseldorf — builder of the Sprinter van — among the sites affected. The industrial action lands just weeks after the carmaker trimmed its full-year guidance, citing a tougher market in China and rising costs.
Guidance Cut and a Weaker Third Quarter
On 28 October, Mercedes-Benz lowered its outlook for 2026. Mercedes-Benz Cars is now expected to deliver an adjusted return on sales of 2–3%, down from a previous 3–5% range. Group EBIT is projected to land at the prior-year level rather than clearly above it, with management pointing to deteriorating conditions in China and higher costs in the fourth quarter.
The same day's third-quarter figures showed group revenue of EUR 30.7 billion and EBIT of EUR 1.77 billion. Free cash flow from the industrial business came in at EUR 172 million — an 87% year-on-year collapse that the company attributes to higher new-vehicle inventories. Adjusted operating profit for the quarter fell 15% to EUR 1.78 billion, while the adjusted passenger-car margin narrowed to 2.5% from 4.8%, alongside a 4.5% decline in revenue.
Should investors sell immediately? Or is it worth buying Mercedes-Benz?
What the Analysts Are Saying
Deutsche Bank Research reaffirmed its buy rating and EUR 65 price target on Monday. Analyst Tim Rokossa, writing after an event with finance chief Harald Wilhelm, flagged continued caution on China and on next year's earnings. DZ Bank took a sharper knife to its fair value on 30 October, cutting the figure to EUR 48 from EUR 55 while keeping its "Buy" rating intact.
India, Costs and the Road Back to Margin
The Chakan assembly line only becomes an economic positive if Mercedes can convert the extra capacity into sufficient volume and profitable utilization. Weighing against that: intensifying competition in China, currency effects and launch costs for new models — the same trio that dragged on the third quarter.
Management has some levers to pull. It describes part of the burden as temporary, and a drawdown of new-vehicle inventories would ease the cash strain. On the cost side, Mercedes plans savings that should offset restructuring expenses within two years. It has also said it will reoffer its voluntary severance program for employees in indirect functions in Germany from December, and intends to suspend the annual special payment for tariff-covered staff — deferring the customary bonus to April 2027 or possibly scrapping it altogether. Additional special payments and longer hours without pay increases are under discussion.
Not everything points one way. Michael Häberle, deputy head of the works council, said on 22 September that management is planning further production volume cuts at all German sites — measures that could relieve the cost base if they align with actual demand, but which also underscore how much adjustment is still needed.
Mercedes-Benz at a turning point? This analysis reveals what investors need to know now.
The Tests That Matter
For 2026, the group expects EBIT at the prior year's level of EUR 5.8 billion. A convincing recovery case needs operating momentum that supports that guidance and then leaves room for upside. The next checkpoints are inventory development and the passenger-car margin in upcoming results — together they will show whether financial relief and better profitability actually arrive in tandem. April 2027, the possible deferral date for the wage bonus, gives a concrete timing marker for the cost and liquidity picture.
Until then, the electric GLC's Indian assembly line will be judged on one measure: the return it generates for the car business.
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