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Mercedes-Benz AG increased its outlook on the back of strong vehicle prices and model mix even as the luxury carmaker warned of economic turbulence due to Europe’s worsening energy crisis, high inflation and protracted supply-chain problems.
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Jul 27, 2022 • 13 minutes ago • 1 minute read • Join the conversation
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(Bloomberg) — Mercedes-Benz AG increased its outlook on the back of strong vehicle prices and model mix even as the luxury carmaker warned of economic turbulence due to Europe’s worsening energy crisis, high inflation and protracted supply-chain problems.
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The world’s biggest luxury-car maker now expects group profit to be slightly higher than last year, rather than unchanged, while returns from carmaking are seen at between 12% to 14%, slightly higher than before, the company said Wednesday. Mercedes also reported second-quarter results that beat expectations.
“We are enhancing our vigilance and resilience to manage increasingly complex macroeconomic and geopolitical challenges,” Chief Executive Officer Ola Kallenius said in a statement. “At the same time, we have good reasons to remain confident, with ongoing strong demand, a fresh vehicle portfolio and further key product launches this year.”
Shortages of semiconductors and other components continue to cause headaches for the industry, leading to carmakers like Mercedes to prioritize production of their most lucrative models. While availability remains tight, automakers are seeing signs of the supply-chain jam easing. Volvo Cars this month said improvements late in the second quarter were helping production resume.
To counter the threat of gas rationing in Germany, Mercedes is stepping up preparations to run some of its operations without the fuel, it said Wednesday. The company can now produce some of its highest-earning cars without natural gas, a fuel typically used in automaker’s paint operations. Russia’s decision to cut supplies of gas through a key Baltic sea pipeline have raised fears of an abrupt halt of deliveries during winter.
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