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Mercedes-Benz AG said its order backlog will support sales in the coming months in a subdued global economy where demand in Europe is falling behind strong US and Chinese markets.
The luxury-car maker, which has been focusing on selling more of its higher-end cars, expects automaking margins at the upper end of its forecast range, it said Friday. Mercedes has forecast a return between 12% and 14% this year, down from 14.6% in 2022.
“We’re confirming our guidance at the upper end, so you can see there’s a level of comfort that we can hold the level of performance,” Chief Financial Officer Harald Wilhelm said in a Bloomberg Television interview. “We forecast sales at last year’s level maybe with an opportunity on top.”
The shares gained 1.5% in early Frankfurt trading, making Mercedes the top-performing automaker on the Stoxx 600 Automobiles & Parts Index this year. Mercedes currently expects vehicle deliveries around last year’s level of just over 2 million cars.
Carmakers are holding up well in a slowing environment so far, feeding off full order books after lengthy supply-chain problems choked production. Mercedes is moving its model lineup further upmarket to better weather downturns with high-end consumers less affected by factors like high interest rates and record inflation.
Adding to the mix, Tesla Inc. this year intensified vehicle price cuts across its model range, fueling concerns for slimmer returns particularly in the mid-range EV vehicle market. Tesla’s Model Y competes with two of Mercedes’s electric offerings, the EQA hatchback and EQB compact crossover.
“We want to protect our pricing, which is based on the product substance and not pushing volumes,” said Wilhelm. “However, we are not ignorant as to what’s going on around us and we’ll take measures as need be,” he said, adding that the “center of gravity” on EV pricing pressure is firmly at the mass-market end.
Mercedes last week released preliminary earnings showing a 14.8% return on automaking sales in the first quarter, topping analyst estimates.
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