Mercedes shares fell more than 8% Friday after the German carmaker cut its 2024 guidance on the back of weaker demand from China.
The company said late Thursday that it now expects group earnings before interest and taxes (EBIT) to come in “significantly below” the previous year and that its adjusted return on sales would be between 7.5% and 8.5%, down from its earlier forecast of 10% to 11%.
Shares pared losses slightly to trade 7% lower as of 9:15 a.m. London time.
The auto sector was dragged lower, down 3.2%, as Volvo and Stellantis fell 4% and 2.7%, respectively.
Mercedes’ revision was triggered by a “further deterioration of the macroeconomic environment,” primarily driven by weaker Chinese consumption and a prolonged downturn in the country’s real estate sector, the firm said in its Thursday statement.
“This affected the overall sales volume in China including sales in the Top-End segment. Overall, the sales mix in the second half of 2024 is expected to remain unchanged versus the first half, and therefore weaker than originally expected,” the company said.
This is a breaking news story. Please check back for updates.
