Overview
- Mercedes released second-quarter results on Tuesday that showed group operating profit rose to about €1.5 billion while disclosing severe weakness in China.
- The company said China deliveries fell roughly 30% in the quarter and it booked a €704 million non‑cash write‑down on Chinese investments, which collapsed reported cars‑division profit.
- Group earnings were propped up by strong financial‑services and vans performance plus a gain from the planned sale of leasing unit Athlon, helping overall net income rise despite the cars hit.
- Mercedes cut its 2026 sales and group revenue outlook to slightly below 2025 levels and kept car‑business margin guidance while saying margins will likely sit at the low end of the 3–5% range.
- Management announced an accelerated programme of cost and productivity measures focused on German plants and increased production in lower‑cost Eastern Europe to respond to competition from Chinese EV makers.