2026 for the main German car brands started just as 2025 ended, namely amid financial worries and the need for savings. Mercedes-Benz saw profits and margins decline, as did Volkswagen. With a common denominator: the difficulties recorded in China.
VOLKSWAGEN’S FIRST QUARTER IN NUMBERS
Volkswagen kicked off the new year with another drop in operating profit, down 14.3% to 2.5 billion euros and an operating margin at 3.3% (from 3.7%), while analysts expected a substantially stable result. The Wolfsburg-based Group’s revenues stood at 75.7 billion (-2.5%), below estimates of 77.6 billion.
Total deliveries fell to 2.0 million units (-7%). However, the effects of the draconian savings measures are beginning to be felt (much still remains to be done: there is talk of 50,000 fewer jobs by 2030 compared to the 35,000 previously planned): the automotive division’s net cash flow rose to 2.0 billion, a sharp improvement from -0.8 billion in Q1 2025, while net liquidity remains solid at 34.2 billion.
THE SERIOUS DIFFICULTIES IN CHINA
The entire German Group is investing considerable resources to get back on track in China (where it has simultaneously decided to withdraw its Skoda brand) but at the moment this last quarter still confirms the serious difficulties of the period with a further 20% collapse, while in North America the decline is 9%, only partially offset by growth in South America (+3%), Western Europe (+1%) and Central and Eastern Europe (+7%).
MORE DRASTIC MEASURES ON THE WAY
Faced with such numbers, further spending freezes are now evident. CFO and COO Arno Antlitz said bluntly: “In this environment, the cost-cutting measures planned so far are not enough. We must fundamentally transform our business model and achieve structural and sustainable improvements,” once again indicating as priorities the reduction of overhead costs and complexity in the product portfolio, technological platforms, and decision-making levels, as well as an increase in plant efficiency.
IF VOLKSWAGEN WEEPS, MERCEDES DOES NOT LAUGH
Obvious difficulties are also recorded at the Three-Pointed Star House where consolidated revenue fell 5% to 31.6 billion euros, operating profit by 17% to 1.9 billion, and profits by 17.2% to 1.43 billion, while cash flows from industrial activities worsened by 21.2% to 1.86 billion euros.
Mercedes-Benz Cars recorded revenues down 5.3% to 22.96 billion mainly due to a 6% drop in global sales to 419,430 units. Operating profit, adjusted for one-off items, contracted 47.2% to 933 million euros, with a margin falling from 7.3% to 4.1%. The commercial vehicles division also struggled, with operating profit down 12.6% to 415 million and the margin dropping from 11.6% to 10.1%.
MERCEDE’S WEAK POINT IS CHINA
Like Volkswagen, Mercedes-Benz also seems unable to break through the hearts of Chinese customers: in the world’s largest market, sales of Stuttgart’s cars collapsed 27% to 111,621 units, a sign that even for premium models consumers now mainly look to domestic brands. And the German brands are chasing.
