(April 9): Mercedes-Benz Group AG’s car sales fell due to a deepening slump in China, where once-dominant Western brands are losing ground to new domestic challengers pushing into the luxury segment.
The German manufacturer’s global deliveries dropped 6% to just under 500,000 vehicles, as a deterioration in China outweighed gains in Europe and the US. Its sales there tumbled 27% — a steeper fall than the 19% decline in the fourth quarter — underscoring the competitive challenge in the world’s largest auto market.
Investors and analysts are closely watching whether Mercedes can regain its footing in China, long a key profit driver thanks to years of stable growth. To counter the downturn, the automaker is leaning more heavily on local partnerships and development to make products that better fit Chinese tastes.
Demand for high-end vehicles in China remains subdued, while domestic brands continue to gain share. Mercedes has refreshed key models including its flagship S-Class to fend off competition from rivals such as Huawei Technologies Co’s Maextro S800 sedan. The German company previously warned that margins will remain under pressure this year.
There were bright spots elsewhere. Electric-vehicle (EV) sales picked up in Europe, driven by strong demand in Germany for the battery-powered CLA sedan, which was named Europe’s Car of the Year 2026. The model is an early test for Mercedes’ product offensive, with about 40 new vehicles planned in the coming years.
But the recovery faces fresh competition closer to home. Chinese automakers are increasingly targeting Europe’s premium segment, encroaching on territory long dominated by Porsche AG, BMW AG and Mercedes.
See also: US trade chief thinks tech restrictions will block Chinese autos
BYD Co’s luxury Denza brand this week presented models for the region including its flagship Z9GT, a roughly EUR100,000 (US$116,850 or $148,938) EV that offers ultra-fast charging and can sprint from zero to 62 miles in 2.7 seconds.
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