Mercedes-Benz reported weaker second-quarter sales in its core passenger car business on Wednesday, highlighting the growing pressure European automakers continue to face in China’s increasingly competitive premium vehicle market.
China Remains The Biggest Challenge
The German automaker delivered 417,800 passenger cars during the second quarter, an 8% decline from the same period a year earlier, according to a company statement.
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The steepest drop came in China, where deliveries fell 30% year on year. Mercedes attributed the decline to “an intensifying competitive environment and the timing of the company’s current product ramp-ups.”
Stronger Performance In The U.S. And Europe
The weakness in China was partly offset by stronger results in other key markets. Passenger car sales increased 10% in the United States and 4% in Europe, suggesting demand remains relatively resilient outside the world’s largest automotive market.
The regional divergence reflects the increasingly uneven operating environment for global automakers, with China continuing to weigh on overall performance despite healthier conditions elsewhere.
Electric Vehicle Sales Accelerate
Mercedes also reported solid momentum in electric mobility. Deliveries of battery-electric vehicles, including both passenger cars and vans, rose 50% year on year to 63,000 units.
The increase points to continued progress in the company’s electrification strategy, even as overall sales remain under pressure across several markets.
Premium Carmakers Face Mounting Pressure In China
Mercedes is far from alone in facing a tougher competitive landscape in China, where domestic manufacturers have intensified price competition and expanded their presence in the premium segment. The shift has put growing pressure on foreign brands that have traditionally relied on the Chinese market as a major source of both sales growth and profitability.
The industry’s challenges were underscored last month when BMW lowered its 2026 core margin forecast to as little as 1%, citing similar headwinds in China.
