Automakers are revealing their preliminary quarterly results this week, and the early returns aren’t great for Mercedes-Benz Group AG.
Due to domestic issues in both countries, the German luxury automaker is facing several headwinds this year in China and the U.S., two of its most robust markets.
Mercedes-Benz best-selling models (U.S. 2024)
- Mercedes-Benz GLE SUV (67,928)
- Mercedes-Benz GLC SUV (64,163)
- Mercedes-Benz C Class (35,590)
- Mercedes-Benz GLS SUV (28,129)
- Mercedes-Benz GLA SUV (19,079
Mercedes has relied on the largesse of Chinese and American luxury car enthusiasts for years, but that strategy has not paid off so far in 2025.
Image source: Mercedes-Benz
Mercedes-Benz reports sharp declines in two of its most important regions
On Oct. 7, Mercedes revealed that third-quarter global auto sales fell 12% year over year, driven by double-digit declines in the U.S. and China.
Mercedes reported a 27% decline in China car deliveries due to “the market conditions in China.” Those market conditions include a decrease in luxury spending in the nation of 1.5 billion, which is stretching into a second consecutive year.
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According to one estimate from Bain & Co., the Chinese luxury market declined by as much as 20% in 2024.
Here in the States, Mercedes says stock levels were “carefully managed in Q3,” as shipments to the U.S. fell 17% during the period.
This was due to the 25% auto tariffs to which the company was subject for much of the quarter. Still, the company says demand in the U.S. remains strong.
“Overall, we continue to see good demand for our Top-End vehicles and receive excellent feedback for the electric CLA,” said Mathias Geisen, a member of the board of management for Mercedes AG, marketing and sales.
Mercedes made 73,500 U.S. retail sales in the quarter, a 6% sequential decline and a 13% year-over-year decline. Globally, the company sold 441,500 cars in the quarter.
However, year to date, the company’s U.S. sales are still 6% higher than they were a year ago, so the news isn’t all bad.
Mercedes says demand for its electric CLA sedan drove a 22% sequential increase in global sales.
Mercedes struggled in the second quarter
Mercedes-Benz is scheduled to report its third-quarter results on October 29.
It is looking to reverse the decline from a second quarter hampered by tariffs.
Across all its brands, the automaker delivered 547,100 cars between April and June.
Mercedes’ Cars unit reported a 9% decline to 453,700 vehicles sold as support in the U.S and China both dried up.
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Perhaps most concerning was the 18% drop in battery electric sales to 41,900 vehicles. North America deliveries fell 14%, while China deliveries declined 19%.
Even in the second quarter, China and the U.S. were big concerns.
“Deliveries to dealerships were carefully calibrated to navigate new global tariff policies, impacting sales of Mercedes-Benz Cars in the U.S. and China in particular,” Mercedes said last quarter.
Mercedes turns to U.S. manufacturing to blunt tariff costs
U.S. tariffs forced Mercedes-Benz and many other automakers, both foreign and domestic, to pull their guidance for the year due to a lack of visibility.
Mercedes operates two manufacturing plants in the U.S., one in Tuscaloosa and the other in Vance, Alabama. The plants produce four of its most popular models, the GLS and GLE SUVs, the GLE Coupe, and the new C-Class.
The Tuscaloosa plant was Mercedes’ first plant outside of Germany when it was completed in 1995.
Today, the 1,000-acre site has over 5 million square feet of manufacturing space, and its facilities employ more than 11,000 Alabamians.
Mercedes sold 324,500 passenger cars and 49,600 vans in the U.S. last year, representing 16.4% and 12.2% of sales, respectively.
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