Largest decline globally! Mercedes-Benz China's second-quarter sales plummeted 30%, falling back to levels of seven or eight years ago.

Mercedes-Benz released its financial report for the second quarter of 2026 today.

The financial report shows that Mercedes-Benz's global passenger car sales fell 8% year-on-year to 417,765 units, of which sales in the Chinese market were only 98,624 units, plummeting 30% year-on-year, making China the region with the largest decline among Mercedes-Benz's major global markets.

Looking at overall financial data, Mercedes-Benz's Q2 total revenue was 32.061 billion euros, down 3% year-on-year; adjusted EBIT was 2.299 billion euros, up 16% year-on-year; net profit was 1.086 billion euros, up 13% year-on-year.

The profit-level growth was mainly driven by cost control and product structure optimization, but the industrial business adjusted free cash flow was 1.276 billion euros, down 35% year-on-year, reflecting that the erosion of cash flow due to declining sales has already begun to show.

The 30% decline in the Chinese market is particularly striking. For comparison, Mercedes-Benz delivered 575,000 vehicles in China for the full year 2025, down more than 25% from the historic peak of 774,000 in 2020, a year-on-year decline of 19%.

Entering 2026, the downward trend further intensified in the second quarter, with quarterly deliveries falling below 100,000 units, dropping back to levels comparable to those in the same period around 2018.

Mercedes-Benz officially attributed the decline to two factors: first, intensified price competition in the Chinese market; second, the brand is in a product transition period with production ramp-up for new models.

This has also forced older models to face a downgrade attack from domestic new energy vehicles, relying on price cuts to maintain a presence, while the price war further compresses profit margins.

However, global pure electric vehicle sales in Q2 increased by 50% year-on-year to approximately 63,000 units, with new-generation electric models beginning to contribute incremental growth. But this growth mainly came from European and North American markets, while pure electric performance in the Chinese market remains weak.

Mercedes-Benz plans to launch 7 exclusive products in the Chinese market by 2027, including the pure electric GLC, pure electric C-Class, and pure electric E-Class based on the new MB.EA architecture.

However, given the pace at which domestic new energy vehicles iterate products on a monthly basis, whether Mercedes-Benz's product cycle can keep up with the speed of market changes is equally crucial.