Flat Mercedes-Benz 2023 Financials See Sales Slow

Luxury and light commercial vehicle products are the stars of Mercedes-Benz 2023 financial results that overall remained lack-luster.

Ola Kaellenius, CEO of Mercedes-Benz, also indicated that the group would continue investing in research and development of its internal combustion engine offerings well into the next decade. The comments reflect a growing awareness among global automakers that the adoption of alternative powertrains, such as battery-electric vehicles, by consumers will probably be a lot slower than the industry had anticipated.

Presenting the results to investors today, the automaker says group earnings before interest and taxes (EBIT) fell to €19.7 billion ($21.16 billion) from €20.5 billion ($22.02 billion) for the previous year, while overall revenues rose by €3.2 billion ($3.43 billion) over the 2022 results at €153.2 billion ($164.62 billion).

Mercedes-Benz Cars sales volumes overall remain flat, reaching 2,044,100 units in 2023 almost exactly the same as the previous year. However, premium luxury products saw a healthy hike with Mercedes-Maybach up by 19%, the lifestyle G-Class up by 11% and the performance Mercedes-AMG sales rose by 4%. These top-end vehicles accounted for 328,300 sales last year.

The automaker’s flagship S-Class remains the leader in its segment, retaining its market share with around 50% in all key regions. Battery electric vehicles now account for 12% of overall Mercedes-Benz Cars sales with Mercedes-Benz reaching the highest share of EV’s among all traditional foreign manufacturers in the United States in 2023.

Mercedes-Benz says its results must be seen in the context of a challenging environment marked by supply-chain constraints as well as geopolitical and macroeconomic volatility. Tailwinds from net pricing, lower raw material prices and improved manufacturing costs were outweighed by higher inflation charges and supply-chain related costs. As a result the car division’s adjusted EBIT fell to €14.3 billion ($15.36 billion) down from €16.2 billion ($17.4 billion) in 2022.

Its LCV products benefitted from a healthy price premium and product mix, robust net pricing and lower raw material costs combined with efficiency measures, which helped to offset higher inflation-related and logistic costs.

Its large vans offering dominated sales, resulting in record sales in the U.S. where sales grew by 13% to an annual record of 75,100 units. With around 22,700 eVans, sales of electric vans increased by 51% in 2023, accounting for 5% of total sales. Last year also saw the premiere of the new eSprinter and the facelift of the mid-size van portfolio.

The Sprinter is also leading its segment in Europe and Mercedes-Benz Vans leading the market in Germany. Kaellenius, comments: “Mercedes-Benz continued its transformation in 2023, developing new cutting-edge electric and digital innovations, while scaling electric vehicles and delivering solid financial results. In other words, the team once again came through to execute our strategy in challenging times, delivering the eSprinter and the new E-Class.”