Mercedes car earnings plunge 64% as China shuns luxury

STORY: Mercedes Benz reported on Friday a 64% plunge in third-quarter car earnings…

Massively missing analysts’ expectations.

The German premium automaker felt the effects, as Chinese consumers continued to cut back on luxury goods in a weakening economy.

Reflecting on the Q3 results, CFO Harald Wilhelm said that the group will step up cost cuts.

Mercedes said the period’s earnings were hit by a tough market as well as model revamp costs.

Especially for new versions of the G-Class SUV, which will roll out in the next quarter.

The luxury carmaker cut its full-year profit margin target twice during the third quarter.

The results’ rare bright spot was the continued cash flow generation from the industrial business, up 2% year-on-year.

Mercedes joins a growing number of European rivals blaming a weakening Chinese car market for falling profits and margins.

It comes as talks between Brussels and Beijing continue over looming tariffs on imports of Chinese EVs into Europe.

It’s a major headache for European carmakers who depend heavily on exports to China, like Mercedes, due to fears of potential retaliation.