Published : 1 year ago, on 27/07/2023

Mercedes-Benz says better supplies boost orders, economy still weighs

BERLIN (Reuters) – Mercedes-Benz forecast a subdued world economy with monetary policy weighing on consumers even as supply chain issues and energy price pressures eased, as it raised its group earnings outlook for the full-year.

The premium carmaker, in statements issued on Thursday, said its direct sales model being rolled out in new markets was lowering inventory and order intake was stabilising for its cars division.

Still, the outlook for the cars segment of 12%-14% returns on unit sales and revenue at prior level remained unchanged, but property, plant and equipment as well as research and development expenditures will rise, the statement said.

Full-year earnings before interest and tax (EBIT) are now expected to be on par with the 20.5 billion euros ($22.7 billion) made in 2022, it said, having previously expected a slight decline.

Mercedes-Benz Vans’ outlook for adjusted return on sales was raised to 13% to 15% in 2023, up from 11% to 13% previously forecast, marking the second outlook upgrade in less than three months after a significant increase in sales in the second quarter.

Earlier this month, the company reported 6% growth in its second-quarter vehicle sales as a result of high demand for all-electric and top-end vehicles, posting growth in Europe, Asia and North America.

(Reporting by Victoria Waldersee; Editing by Miranda Murray and Miral Fahmy)