Mercedes-Benz Stock: Profits Plunge Amid China Market Challenges

Mercedes-Benz experienced a substantial decline in business performance during the third quarter of 2024, with net profit dropping by more than 50 percent to 1.72 billion euros compared to the previous year. The automotive manufacturer's revenue decreased by 7.18 percent to 34.53 billion euros, reflecting significant market pressures. The company's stock has been trading around 52.10 euros, considerably below its 52-week high of 77.45 euros. In response to these challenges, Mercedes-Benz has announced comprehensive cost-reduction initiatives aimed at saving several billion euros annually.

Strategic Cost Management

To address the challenging economic environment, particularly in the Chinese market where premium models are underperforming due to increased local competition and subdued consumer spending, the company is implementing extensive cost-cutting measures. Despite these financial headwinds, Mercedes-Benz maintains its commitment to job security in Germany through 2029. Market analysts remain optimistic, projecting an average target price of 73.70 euros, suggesting significant upside potential despite current market difficulties.