Mercedes-Benz on Friday said its profits in the third quarter had plummeted by more than 50%, having taken a particularly tough hit from weakness in the key Chinese market.

Germany's auto giants are facing increasing competition from homegrown carmakers in China as the Chinese economy battles a period of flagging economic growth. China has the second-biggest economy in the world, behind the US.

How the figures stack up

Net profit stood at €1.72 billion ($1.86 billion), down from €3.7 billion a year ago as sales slipped almost 7% to €34.5 billion, the group said.

It saw vehicle deliveries dip by 3% overall, pulled down by a 13% fall in China.

For the group's most profitable luxury cars, worldwide sales fell by 12%.

Mercedes said it expected annual sales in 2024 to be slightly below the previous year, with the fourth-quarter results expected to be similar to the third.

The company had already lowered its annual outlook twice during the third quarter, forecasting operating profit to be "significantly below the prior year level."

What the company said

Mercedes said the poor figures were due to a "challenging market environment and fierce competition, particularly in China."

The automaker's chief financial officer Harald Wilhelm admitted that the earnings "do not meet our ambitions."

Mercedes-Benz stocks fell 3.7% after the figures were released, with a Europe-wide index showing automaker stocks dropping 0.9%.

In addition to their difficulties in China, which has been a major source of growth for many years, European carmakers are struggling with high costs at home and a stumbling shift toward electric vehicles.

The European Union is also due to place higher tariffs on imports of electric cars from China, a headache in particular for German manufacturers who are heavily invested in the country and are anxious about retaliation.

rc/wd (dpa, AFP)