(Bloomberg) -- 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.
“Our focus on top-end cars and premium vans has made Mercedes-Benz more weatherproof, allowing us to accelerate our digital and electric transformation — even in a period of economic uncertainty,” Chief Financial Officer Harald Wilhelm said in a statement on the company’s full first-quarter earnings release.
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.
Demand in Europe has remained sluggish during the first quarter with strong orders in China and the US on “a good level,” Mercedes said Friday.
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.
Mercedes last week released preliminary earnings showing a 14.8% return on automaking sales in the first quarter, topping analyst estimates.
(Updates with CFO comment in third paragraph)
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Mercedes Sees Order Book Supporting Sales in Slowing Economy - BNN Bloomberg
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