STUTTGART (Reuters) – Mercedes-Benz on Thursday reported an adjusted return on sales in its car division of 12.6% for 2023, in line with its forecast, as inflation and supply chain-related costs ate into its profits.
Yet it forecast lower adjusted returns on sales across the cars and vans division for 2024, expecting 10-12% for cars and 12-14% for Vans, down from this year’s 15.1%.
Over the course of 2023, the carmaker warned of supply snags and inflation weighing on sales, with price wars particularly in the electric vehicle segment placing pressure on margins.
Still, Mercedes-Benz, the first of Germany’s three top carmakers to report 2023 results, was expected to have the highest returns margin among the three, in part due to its strategy of passing higher costs to customers.
The luxury carmaker raised its average price by 2% to 74,200 euros ($80,395.70) and increased spending on research and development for future technologies like its MB.OS platform.
Group earnings before interest and taxes fell to 19.7 billion euros from 20.5 billion euros last year despite a 2% rise in revenue.
($1 = 0.9229 euros)
(Reporting by Victoria Waldersee; Editing by Miranda Murray)