Mercedes-Benz, the renowned German luxury-car maker, has announced a decline in its net profit and revenue for the third quarter. The company attributes this decrease to a softened demand and negative effects of foreign-exchange rates.
In the third quarter, Mercedes-Benz witnessed a 7% year-on-year drop in net profit, amounting to 3.72 billion euros ($3.93 billion). Furthermore, the revenue fell by 1.4% to EUR37.20 billion.
The auto maker reported a 3.7% decline in car sales, reaching approximately 510,500 units. However, van sales experienced a slight increase of 1.1% to about 106,000 units.
Despite lower volumes and changes in the model mix, Mercedes-Benz states that "healthy net pricing partially offset" these factors. Additionally, the company acknowledges that currency effects have also contributed to the decline in net profit.
In terms of profitability within different segments, Mercedes-Benz's cars segment witnessed a decrease in the adjusted return on sales from 14.5% to 12.4% compared to the previous year. On the other hand, the vans business saw an increase in its adjusted margin to 15% from 13% in the prior-year period.
Earnings before interest and taxes (EBIT) for the quarter declined by 6.8%, reaching EUR4.84 billion. The company also reported a significant drop of 22% in free cash flow for the industrial business, amounting to EUR2.35 billion. This decline is primarily due to lower passenger car sales and increased investments in technology.
Despite the challenging quarter, Mercedes-Benz remains committed to its pursuit of excellence in the luxury-car market.