2024-09-21 00:10:29
It is becoming increasingly clear how serious the situation is for German car manufacturers. One of the companies is revising its business outlook.
The car manufacturer Mercedes-Benz has lowered its earnings forecast for the current year. The Stuttgart-based company justified this after the stock market closed with a further deterioration in the economic environment, particularly in China. Earnings before interest and taxes (EBIT) are therefore likely to be significantly below the level of the previous year, the company announced.
Until now, Mercedes-Benz had forecast a slight decline. Mercedes-Benz now also sees the free cash flow of the industrial business as being significantly lower than last year. Here, too, the company had recently expected a slight decline.
The Mercedes-Benz Cars division is responsible for this, for which the group has lowered its forecast for the adjusted return on sales. It is expected to be between 7.5 and 8.5 percent for 2024, compared to the previously forecast 10 to 11 percent. This implies an expected adjusted return on sales of around 6 percent in the second half of the year.
In China, the slowdown in momentum had an impact on overall sales, including sales in the high-price segment, it said. Overall, Mercedes-Benz expects the sales mix in the second half of the year to remain unchanged from the first half of the year and thus be weaker than originally expected.
The group left the forecasts for the adjusted return on sales of Mercedes-Benz Vans as well as for the adjusted return on equity of Mercedes-Benz Mobility untouched. The shares of the Stuttgart-based carmaker fell by as much as 8.4 percent to a two-year low.
But the other car stocks in the DAX also went downhill significantly. “The negative news from the automotive sector doesn’t stop,” wrote LBBW analysts in a commentary. Investment strategist Jürgen Molnar from broker RoboMarkets also stated: “The problem is always the same.” Cars are difficult to sell these days, mainly in China, but also in all other parts of the world.
The prices of other car manufacturers also came under pressure. Porsche, BMW and Volkswagen shares were at times between 4.9 and 3.5 percent weaker. Since the beginning of the year, losses at BMW and Volkswagen, among others, totaled a good 24 percent and 16 percent. The DAX rose by more than 13 percent in the same period. The European car index fell by 3.6 percent at times on Friday.