Mercedes-Benz lifts profit forecast as luxury cars boom

Mercedes-Benz (MBGn.DE) 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 Harald Wilhelm said, adding it would prioritise bringing down inventory in the fourth quarter. The company forecast a slight increase in fourth-quarter sales from a year earlier.

The company has no intention to lower list prices or step up discounting in the face of rising financial pressure on consumers, 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 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 for the cars division to 13-15% from 12-14%.