Investing.com -- Germany's Mercedes Benz Group Group (ETR:MBGn) has reported a drop in third-quarter sales, dented by weak economic conditions in China and a "subdued" market for battery-powered electric vehicles (EVs).
Group-wide sales -- which include both passenger cars and vans -- during the period fell by 3% versus the prior year to 594,600, Mercedes-Benz (OTC:MBGAF) said on Thursday. Compared to the preceding quarter, the figure decreased by 1%. Battery EV sales also slumped by 31% from a year ago to 46,900.
"[S]ofter demand, mainly in Asia, affected overall sales," the company said in a statement.
In China, the world's largest automotive market, car sales came in at 170,700, a 13% decline. Mercedes-Benz's vans unit also "faced a softening environment in the third quarter" in the country, the company noted.
Mercedes-Benz, along with rivals like Volkswagen (ETR:VOWG_p) and BMW (ETR:BMWG), all previously slashed their annual performance outlooks due to sluggishness in China.
Mercedes-Benz, in particular, lowered its guidance for the second time in three months in September, with the firm now expecting annual group earnings before interest and taxes to be well below last year's level of 19.7 billion euros. It had earlier forecast a slight decrease.
Group core earnings are now seen at 15.83 billion euros, according to LSEG estimates cited by Reuters.
Adjusted return on sales from Mercedes-Benz's passenger cars are tipped to between 7.5% and 8.5% in 2024 versus a prior estimate of 10% to 11%. This would imply an anticipated adjusted return on sales of roughly 6% in the second half of 2024.
Chief Executive Ola Kaellenius told investors last month that he was unsure how long its underperformance in China would go on for, warning that he "remain[s] cautious for the foreseeable future."
Demand in China, a key destination for Germany's export-oriented economy, has been struggling under the weight of recently underwhelming economic growth and a severe real estate crisis.
(Reuters contributed reporting.)