# Mercedes-Benz lifts profit forecast as luxury cars boom Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-26 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Mercedes-Benz Raises Full-Year Profit Forecast Amid Supply Meta Description: Mercedes-Benz adjusts full-year profit forecast by 15% due to strong demand and cost savings, overcoming supply chain issues. Full details here. URL: https://financedigest.com/mercedes-benz-lifts-profit-forecast-as-luxury-cars-boomhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-10-26t052938z2lynxmpei9p03yrtroptp4daimler-results-1736814971309-compressed.jpg) By Victoria Waldersee BERLIN (Reuters) -Mercedes-Benz raised its full-year profit forecast on Wednesday as strong demand for luxury cars and cost savings offset the supply chain bottlenecks that have hampered industry output this year. The German automaker said it now expected group earnings to rise at least 15% this year, compared with a previous forecast of 5%-15% growth, after profits at its cars division almost tripled in the third quarter from pre-pandemic levels. Pent-up demand in Europe and a high order backlog would carry the company into next year, [chief financial officer](https://www.financedigest.com/tips-for-choosing-the-right-chief-finance-officer-for-your-business.html "Tips for Choosing the Right Chief Finance Officer for Your Business") Harald Wilhelm said, adding it would prioritise bringing down inventory in the fourth quarter. The company [forecast a slight increase in fourth-quarter sales](https://www.financedigest.com/truck-maker-volvo-posts-record-q1-as-sales-margins-beat-forecasts.html "Truck maker Volvo posts record Q1 as sales, margins beat forecasts") from a year earlier. The marked [increase in profitability](https://www.financedigest.com/4-tips-for-landlords-to-increase-rental-property-profits.html "4 Tips for Landlords to Increase Rental Property Profits") comes after Mercedes-Benz pledged in 2020 – then part of Daimler Group – to cut fixed costs, capital expenditure and research and development spending by more than 20% by 2025. [Inflation in its own costs means it may need to make more cuts than planned to reach that target](https://www.financedigest.com/the-mouse-that-roared-new-zealand-and-the-worlds-2-inflation-target.html "The mouse that roared: New Zealand and the world’s 2% inflation target"), chief financial officer Harald Wilhelm told a media call. Asked how the carmaker would assist suppliers which are struggling with [rising costs](https://www.financedigest.com/suedzucker-quarterly-profits-surge-73-5-despite-cost-rise.html "Suedzucker quarterly profits surge 73.5% despite cost rise"), Wilhelm said negotiations were taking place on a case-by-case basis but that this was “not an invitation to send us their bills. Everyone [needs to do their homework and adapt to rising](https://www.financedigest.com/electric-scooters-market-rising-need-for-eco-friendly-vehicles.html "Electric Scooters Market – Rising Need For Eco-Friendly Vehicles ") uncertainty and the transformation \[to electrification\],” Wilhelm said. “Whoever started too late with that now has a problem.” The company has no intention to lower list prices or step up discounting in the face of rising [financial pressure on consumers](https://www.financedigest.com/uk-consumer-mood-hits-one-year-high-but-financial-gloom-persists.html "UK consumer mood hits one-year high, but financial gloom persists"), he added, sticking to its strategy of prioritising the luxury status of its vehicles over volume sales. The [cars division earned 4.03 billion euros](https://www.financedigest.com/stellantis-to-invest-130-million-euros-in-german-plant-for-new-opel-electric-car.html "Stellantis to invest 130 million euros in German plant for new Opel electric car") from 28.2 billion revenue in the third quarter, compared with 1.4 billion euros and 23.5 billion respectively in the same quarter of 2019. The company [raised its full-year margin forecast](https://www.financedigest.com/cisco-forecast-raise-allays-tech-spending-fears-lifts-shares.html "Cisco forecast raise allays tech spending fears, lifts shares") for the cars division to 13-15% from 12-14%. WITHDRAWAL FROM RUSSIA Wilhelm also said on an analysts’ call the group would withdraw from the Russian market and sell off [shares in its Russian subsidiaries – consisting of its industry](https://www.financedigest.com/car-sharing-industry-revs-up-with-wembley-park-residents-in-the-driving-seat.html "Car sharing industry revs up with Wembley Park residents in the driving seat") and financial services businesses – to local investors. The company had suspended exports of passenger [cars and vans to Russia as well as local manufacturing in March](https://www.financedigest.com/uk-new-car-sales-rise-17-in-march-best-ever-month-for-evs.html "UK new car sales rise 17% in March; best ever month for EVs") following Russia’s invasion of Ukraine. Mercedes-Benz has a [car plant](https://www.financedigest.com/volvo-car-considers-opening-third-plant-in-europe.html "Volvo Car considers opening third plant in Europe") in the town of Esipovo, 40 kilometres (25 miles) northwest of Moscow, with over 1,000 employees that produces E-class sedans and SUVs. (The withdrawal) is not expected to give [rise to any further significant effects on the group’s profitability](https://www.financedigest.com/pizza-firm-dp-eurasia-delivers-profit-rise-evaluating-russian-business.html "Pizza firm DP Eurasia delivers profit rise, evaluating Russian business") and financial position beyond those reported in previous quarters,” Wilhelm said. [Group earnings reached 5.2 billion euros](https://www.financedigest.com/telecoms-group-orange-signs-sustainability-linked-refinancing-of-6-billion-euros-syndicated-credit-facility.html "Telecoms group Orange signs sustainability-linked refinancing of 6 billion euros syndicated credit facility") from July to September, up 83% from last year, with revenue up by a fifth to 37.7 billion euros, adjusted returns of 14.5% for the cars division and 12.7% at Mercedes-Benz Vans. Mercedes-Benz Vans saw [sales up by just under a fifth to 104,000 vehicles, with electric van sales up by a third this year](https://www.financedigest.com/uk-car-sales-hit-30-year-low-in-2022-but-could-grow-15-this-year-smmt.html "UK car sales hit 30-year low in 2022, but could grow 15% this year – SMMT") so far. Top-end luxury sales lifted revenues, making up 15% of overall [cars sales](https://www.financedigest.com/mercedes-posts-rise-in-q1-sales-boosted-by-evs-premium-cars.html "Mercedes posts rise in Q1 sales boosted by EVs, premium cars") in the third quarter. ($1 = 1.0047 euros) (Reporting by Victoria Waldersee, Editing by Shri Navaratnam and Mark Potter) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---