German luxury carmaker Mercedes-Benz reported a decline in core car sales for 2024, reflecting a challenging year for the global automotive industry. The company’s sales figures, released on Friday, paint a picture of a brand struggling with a weak global economy and a shortfall in electric vehicle (EV) sales.
Table of Contents
A Year of Challenges:
Mercedes-Benz sold 1,983,400 cars in 2024, a 3% decrease compared to 2023. This decline is attributed to several factors:
- Weakening Economy: A global economic slowdown dampened consumer demand for luxury vehicles, particularly in key markets like China, where Mercedes-Benz experienced a 7% drop in sales.
- Shifting Consumer Preferences: The growing popularity of electric vehicles (EVs) impacted sales of traditional gasoline-powered cars.
The EV Hurdle:
While Mercedes-Benz offers a growing portfolio of electric vehicles, sales of these models fell short of expectations in 2024. Annual sales of battery-electric cars (BEVs) dropped by a concerning 23% to 185,100 vehicles. This shortfall puts pressure on the carmaker as new, harsher EU CO2 emission reduction targets take effect in 2025. Failure to meet these targets could lead to hefty fines or a reliance on “pooling deals” with other manufacturers – a strategy Mercedes-Benz has previously criticized.
Cost-Cutting Measures in Place:
The company has already taken steps to address its challenges. In 2024, Mercedes-Benz cut its full-year profit margin target twice and announced plans for increased cost-cutting measures. Additionally, they aim to lower their mid-term profitability targets due to the uncertain market outlook.
Looking Forward:
Despite the 2024 slump, Mercedes-Benz remains optimistic about the future. The company is scheduled to release full-year 2024 financial results on February 20th, which will provide a clearer picture of the company’s financial health. However, the challenges highlighted by declining sales underscore the need for Mercedes-Benz to accelerate its transition to electric vehicles and adapt to a changing luxury car market.