Mercedes raises outlook; cuts gasoline use

“We’re enhancing our vigilance and resilience to handle more and more complicated macroeconomic and geopolitical challenges,” CEO Ola Kallenius mentioned in an announcement. “On the identical time, now we have good causes to stay assured, with ongoing sturdy demand, a contemporary automobile portfolio and additional key product launches this 12 months.”

Within the newest quarter, Mercedes noticed an adjusted return on gross sales of 14.2 p.c within the Mercedes-Benz Automobiles division, up from 12.8 p.c in the identical quarter final 12 months, whereas returns in its vans division fell barely to 10.1 p.c from 11.4 p.c final 12 months.

Wanting ahead, it raised its anticipated adjusted earnings margin for its vehicles division within the second half to 12 p.c to 14 p.c from 11.5 p.c to 13 p.c beforehand.

The primary half noticed a 15 p.c margin however greater materials prices, analysis and improvement spending and results from the used automotive market may weigh on the second half, the corporate mentioned.

Decrease gasoline consumption

Addressing issues over how German trade will handle gasoline consumption within the occasion of additional cuts to provide from Russia, Kallenius mentioned Mercedes has decreased its gasoline consumption 10 p.c in Europe whereas sustaining full operations.

The corporate mentioned it may cut back its gasoline consumption in Germany 50 p.c if regional pooling happened. It mentioned it had discovered a strategy to function the paint store in its Sindelfingen plant with out gasoline in an emergency. The plant builds the high-end electrical EQS, S-Class and Maybach fashions.

A worsening financial local weather weighing on shoppers are combining with the continued struggles to acquire sufficient semiconductors for automakers. Ongoing pandemic lockdowns in China stopping individuals from shopping for vehicles are one other risk.

Even so, Mercedes predicted wholesome demand for its fashions in the course of the second half with strong order books indicating demand continues to outstrip out there vehicles.

New chip contracts

Kallenius mentioned chip provide constraints hampered manufacturing of electrical and top-end automobiles within the second quarter and are the principle operational challenge for the second half. The carmaker has already struck a number of contracts instantly with chipmakers, he mentioned.

Like different carmakers, Mercedes is prioritizing manufacturing of its most profitable fashions.

Mercedes deliveries fell 7 p.c in the course of the second quarter due to an absence of chips and logistical challenges. Order books are full and the corporate expects to see a slight improve in gross sales, with the top-end luxurious phase forecast to develop greater than 10 p.c.

Whereas chip availability continues to be tight, automakers are seeing indicators of the jam easing. Volvo Automobiles this month mentioned enhancements late within the second quarter have been serving to manufacturing resume.

Reuters and Bloomberg contributed to this report