Mercedes-Benz Reports Q1 Profit Drop, Announces Global Production Cut of Over 10%

Mercedes-Benz Group reported a 17% year-over-year decline in earnings before interest and taxes (EBIT) to €1.9 billion for the first quarter of 2024. Net profit fell by 17% year-over-year to €1.43 billion, while revenue decreased by 4.9% to €31.6 billion. The automotive segment’s profit margin dropped to 4.1%, down from 7.3% in the same period last year. The company plans to reduce its global production capacity by more than 10%, to approximately 2.2 million vehicles, to achieve cost savings—primarily through adjustments to overseas manufacturing capacity and natural workforce attrition, as labor agreements in Germany guarantee plant employment until 2035. Mercedes-Benz noted strong demand for new products and a robust order backlog, expecting improved performance in the second half of the year. However, it warned that escalating conflicts in the Middle East could undermine consumer confidence. Combined with rising fuel prices, higher interest rates, and falling asset prices, these factors may dampen vehicle sales. Additionally, newly imposed U.S. tariffs on imported vehicles are further intensifying profit pressures.