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Mercedes Q3 EBIT Rises, but Cars Adjusted Profit Halves

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Illustrative archive photo of a Mercedes-Benz GLE parked outdoors

Mercedes-Benz Group reported €1.77 billion in third-quarter 2026 EBIT, more than double the €750 million recorded a year earlier, but the headline increase masks a much weaker result in its core car business. Adjusted Mercedes-Benz Cars EBIT fell 51% to €560 million, and the division’s adjusted return on sales narrowed to 2.5%.

The company says lower adjustments than in the year-earlier quarter were the main reason reported group EBIT rose. On an adjusted basis, group EBIT declined 15% to €1.78 billion. Revenue fell 4.5% to €30.7 billion, while industrial free cash flow dropped 87% to €172 million.

Mercedes Q3 2026 results at a glance

  • Revenue: €30.698 billion, down 4.5% year over year
  • Reported group EBIT: €1.773 billion, up 136%
  • Adjusted group EBIT: €1.78 billion, down 15%
  • Net profit: €1.518 billion, up 28%
  • Industrial free cash flow: €172 million, down 87%
  • Mercedes-Benz Cars sales: 407,232 vehicles, down 7.8%

The gap between reported and adjusted performance is important. Reported EBIT benefited from a cleaner comparison with a prior-year quarter that included larger restructuring and other special charges. Adjusted figures remove those effects and show that the underlying business faced substantial pressure.

Cars profit halves as China weighs on results

Mercedes-Benz Cars generated €22.374 billion of revenue, down 5.8%. Reported divisional EBIT rose slightly to €455 million, but adjusted EBIT fell from €1.139 billion to €560 million. The adjusted return on sales declined from 4.8% to 2.5%.

Mercedes attributed the strain to weaker earnings in China, currency effects, launch campaigns and product-lifecycle spending. Global car sales fell 8%, even as deliveries outside China improved. Europe grew 5%, Germany rose 13% and the United States increased 6%, according to the company.

Reuters reports that tougher competition and softer demand in China are eroding sales and pricing power for German premium brands. Mercedes said market conditions became more challenging during the year, which helps explain why growth in Europe and the U.S. was not enough to protect the Cars margin.

Record EV sales do not erase the margin problem

Mercedes-Benz Cars recorded 68,428 battery-electric sales in the quarter, up 60.5% from a year earlier and the division’s highest quarterly total. Battery-electric vehicles accounted for 16.8% of global car sales, while BEVs and plug-in hybrids together represented 25%.

That is meaningful product momentum, but it should not be confused with stronger profitability. Cars adjusted EBIT still fell by half, and the division’s cash flow before interest and taxes swung to negative €171 million from positive €1.356 billion. Stronger EV volume therefore coexisted with lower sales, margin and cash generation across the broader car operation.

Vans and finance provide support

Mercedes-Benz Vans remained comparatively resilient. Sales rose 1% to 84,421 units, adjusted EBIT slipped 4% to €397 million, and adjusted return on sales was 9.4%. Electric-van sales increased 12%.

Financial Services delivered the strongest profit growth among the reported divisions. Adjusted EBIT rose 42% to €445 million, and adjusted return on equity increased to 13.8% from 9.6%. Mercedes said better portfolio margins, lower credit-risk costs and cost control supported the result.

Guidance cut as fourth-quarter costs rise

Mercedes lowered its full-year Cars adjusted return-on-sales forecast to 2%–3%, from 3%–5%. Group EBIT is now expected to be roughly level with 2025 rather than significantly higher, while industrial free cash flow is expected to be significantly below the prior-year level.

The revised outlook is a company forecast, not a guaranteed result. Mercedes cited weaker Chinese conditions and higher expected fourth-quarter costs, including material expenses. Its €172 million quarterly industrial free cash flow also missed the €422 million consensus figure disclosed in the company’s regulatory update.

Mercedes is continuing its product and technology investment despite the pressure. Chiefs Review has separately covered the company’s €500 million PLM.AI development overhaul and its plan to expand its NVIDIA driving-technology partnership without a confirmed launch date.

Featured image: illustrative archive photo of a Mercedes-Benz GLE; it does not depict a Q3 2026 launch or a battery-electric model. Photo by Celik Studio via Unsplash, used under the Unsplash License.

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