Sales decline in China contrasts with growth in the U.S. and Europe as company focuses on premium models
Category: Business
SEOUL — Mercedes-Benz announced a 6% decline in global passenger car sales for the first quarter of 2026, totaling 419,400 vehicles sold. The sharp drop in the Chinese market, where sales plummeted by 27% to 111,600 units, overshadowed growth in other regions, particularly the United States and Europe.
According to the company, the decline in China was attributed to a gradual phase-out of entry segment models ahead of new releases, which created a sales vacuum. This decline was compounded by fierce price competition from local premium brands and broader economic uncertainties in the region. In stark comparison, the U.S. market saw a remarkable 20% increase, with sales reaching 81,100 units. European sales also showed positive trends, growing by 7% across the continent and 9% in Germany.
Mercedes-Benz’s total group sales, including vans, amounted to 499,700 units, aligning with company expectations. The luxury division, including Mercedes-AMG and Mercedes-Maybach, demonstrated strong performance, with sales growth of 5% and 34%, respectively. This success highlights the continuing demand for premium models, which have been a focal point of Mercedes-Benz’s strategy.
In the electric vehicle (EV) segment, sales of battery electric vehicles (BEVs) increased by 9%, totaling 44,300 units. The impressive growth in the EV sector was driven by strong demand for the new electric CLA, which has been recognized with awards such as 'Car of the Year 2026' in Europe. The production of the electric CLA is currently operating at full capacity in the Rastatt plant, with order books for the electric GLC and GLB also filled until the end of the year.
Mercedes-Benz has identified 2026 as a 'transition year' for its operations in China. The company plans to accelerate new model launches and expand its offerings equipped with advanced infotainment systems and driver assistance technologies aimed at local customer preferences. Recent introductions, including the new S-Class and Maybach S-Class, feature the latest smart technologies, marking a strategic pivot to regain market share in the Chinese luxury segment.
In the U.S., the company’s sales rebound was bolstered by increased wholesale deliveries aimed at replenishing dealer inventories. The Tuscaloosa plant, celebrating its 30th anniversary, also achieved a milestone by producing its five millionth vehicle. This achievement comes as the company navigates high import tariffs yet manages to sustain double-digit growth in the U.S. market, underscoring the resilience of its business model.
In a related note, Mercedes-Benz Korea reported a strong financial performance for the previous year, driven by the successful introduction of premium models such as the AMG and G-Class. The Korean subsidiary recorded an operating profit of 2.05 billion won ($1.5 million), representing a 30.1% increase from the previous year. Sales revenue reached 6.1883 trillion won ($4.6 billion), an 8.7% rise compared to the prior year, with net profit also climbing by 19.2% to 1.481 billion won ($1.1 million).
Notably, the company’s dividends and charitable contributions saw a decline, with dividends falling by 34.8% to 1.237 billion won ($900,000) and donations decreasing by 42.6% to 40 million won ($30,000). A spokesperson attributed the improved financial results to the strong sales performance of the premium lineup introduced last year.
As Mercedes-Benz navigates the challenges of the global automotive market, the focus remains on adapting to regional demands and leveraging its premium offerings to drive future growth. The company is expected to reveal additional models in the coming months, including the highly anticipated electric C-Class, which is projected to contribute significantly to sales momentum.
With a clear strategy aimed at enhancing its product portfolio and addressing market dynamics, Mercedes-Benz is positioning itself to rebound in the competitive automotive sector, particularly in the face of fluctuating demand across its key markets.