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(Sharecast News) - Mercedes-Benz cut its full-year sales and revenue forecasts on Tuesday as worsening conditions in China outweighed stronger demand elsewhere, with second-quarter car sales in the country plunging 30% amid intense competition from local manufacturers and cautious consumer spending.
The German carmaker now expects both vehicle sales and group revenue to be slightly below 2025 levels, having previously forecast broadly stable results, and booked a 704m non-cash impairment related to its Chinese business.
Second-quarter group revenue fell 3.3% to 32.06bn, although operating profit rose 22% to 1.55bn as cost reductions and stronger contributions from vans and financial services helped offset weakness in the core cars division.
Mercedes maintained its 3% to 5% adjusted return-on-sales guidance for the cars business.
"Customer response to our new models is strong," noted chief executive Ola Kllenius.
The company said it would continue intensifying cost and productivity measures, particularly at its German operations.
At 1653 CEST (1553 BST), shares in Mercedes-Benz Group were up 2.98% in Frankfurt at 46.67.
Reporting by Josh White for Sharecast.com.
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