THEGerman automotive industry is in crisis. After Volkswagen and BMW, a sound the alarm, now, it is Mercedes-BenzThe Star Colossus has lowered forecasts for 2024 because of worsening of the Chinese market. This is the second profit warning in a few months: adjusted yields are now estimated between 7,5% and 8,5%, compared to the 11% initially forecast.
Le new forecasts indicate an operating profit (Ebit) “significantly lower than in 2023”, with the margins of the automotive division, which will fall from 14,6% two years ago to 6% in the second half of 2024. slowdown in demand on the Chinese market has weighed on company accounts, causing an immediate Mercedes-Benz stock price collapse, which lost more than 8% in Frankfurt, hitting a two-year low of 54,05 euros. Despite the crisis, the outlook for Mercedes-Benz Vans and Mercedes-Benz Mobility remains stable, with expected returns of 14%-15% and 8,5%-9,5%, respectively.
In addition to the reduced margins, Mercedes-Benz expects further asset write-downs in the second half of 2024, although no specific details were provided.
China's economic crisis slows demand
China, a key market for Mercedes-Benz, has seen a sharp drop in demand, especially for luxury models such as the Class S and Maybach sedans. This slowdown has not only affected Mercedes, but also other German manufacturers such as bmw e Volkswagen, who are facing similar difficulties.
The economic and real estate crisis in China has reduced spending capacity of the wealthiest consumer segment, those who traditionally fueled sales of high-end German cars.
End of joint venture with BYD
Recently, Mercedes announced the conclusion of its alliance with BYD, a partnership that lasted over a decade. The j, which had given birth to the Denza brand to produce affordable vehicles for the Chinese market, did not achieve the expected results, with only 23.000 cars sold between 2011 and 2021.
In the meantime, Byd has grown exponentially, becoming a giant in the automotive sector and aiming to expand into Europe. With models such as the Denza D9 and the luxury sedan Denza Z9, BYD is positioning itself as direct competitor of Mercedes in the premium segment. And so, the Stuttgart-based company has reduced its stake in the joint venture from 50% to 10%, marking its gradual detachment from the alliance.
Domino effect in the sector: Stellantis crashes on the stock market
Il profit warning launched by Mercedes-Benz ha triggered a wave of sell-offs on the stock market which has overwhelmed the entire automotive sector. stellantis loses 2,49%, while BMW and Volkswagen lose more than 3%. Since the beginning of the year, Stellantis has lost almost 50% of its value on the stock market, reaching price levels not seen since March.
This Domino effect reflects investors' fear of a global slowdown in the auto sector, aggravated by macroeconomic uncertainties in China, but also by rising raw material costs and competition from Chinese electric car manufacturers.
Registrations collapse in August, deep red for electric cars (-36%)
Il car registration market in Europe, in fact, continues to show signs of weakness. In August 2024, the number of new registrations in the European Union, together with EFTA and the United Kingdom, recorded a decrease of 16,5% compared to the same month of the previous year with a total of 755.717 units sold. The data more worrying is the German market, which suffered a drop of 27,8%, followed by France (-24,3%) and Italy (-13,4%).
Sales of vehicles powered by traditional fuels continue to show a negative trend: registrations of petrol car decreased by 17,7%, while those Diesel have suffered a collapse of the 26,4%, now representing only 11,2% of the market. Instead, the electric cars (BEV) who have seen a drastic drop of 36%, having a 68,8% decline in Germany and 33,1% in France.
Sales down for all car manufacturers, only Volvo is saved
The difficulties of the car market are also reflected in the performance of individual car manufacturers. stellantis saw a 29,5% drop in registrations in August 2024, going from a market share of 16,7% to 14,4%. Brands such as Citroën, Fiat, spear e DS have recorded losses of more than 40%, while Peugeot e Jeep have suffered a decline of approximately 15%. Also Renault (-14,9%), bmw (-15,6%) And Mercedes-Benz (-12,7%) recorded a sharp drop in sales.
The only exception to this negative scenario is Volvo, which recorded a growth of 28,6% in August and a 38% increase since the beginning of the year. The brand also Tesla, despite a sharp 43% drop in sales in August, continues to maintain a significant position in the electric car market.
