Mercedes-Benz earnings: Raises guidance, sees ‘healthy and high’ demand in all core markets
Mercedes-Benz Group (MBG.DE) reported higher revenue and adjusted earnings before interest and taxes (EBIT) for the second quarter compared to last year, despite the effects of “semiconductor bottlenecks and supply-chain disruptions.”
The supply disruptions led to a 7% drop in sales, Mercedes said, but revenue still rose 8% from a year ago, and adjusted EBIT spiked 20%. Better pricing and margins boosted both for Mercedes.
The German automaker also upped its guidance for the year, now seeing revenue for 2022 to be “significantly above” last year’s level, up from a previously expected “slightly above.” EBIT is now seen “slightly above” 2021, rather than “at the prior-year level.”
Despite the headwinds the automaker faced in the U.S. market, it was still able to deliver for its customers after a rough Q1.
“I would say that the semiconductor crunch is continuing also in 2022, but what we could observe in the second-quarter was a more stable supply,” Mercedes Benz USA CEO Dimitris Psillakis said in an interview with Yahoo Finance. “So that helps us stabilize our supply to our dealers and supply to the market, which gave us a better Q2 than Q1 earlier this year.”
From a demand perspective, globally the brand says it continues to see “healthy and high quality” demand in all core markets, and that its order books are solidly filled, with demand seen as higher than supply through the course of the year.
Mercedes USA is also seeing that trend. “We see the demand being pretty high, especially in the segment that we're operating, the premium segment, the luxury segments,” Psillakis says. “We see the demand staying and remaining high despite inflation or the weakening economy.”
While U.S. customers are focused on buying Mercedes’ top end or higher end models, meaning V8 powered cars and SUVs, Psillakis says there is growing demand for its electric offerings as well. Mercedes intends to go fully electric by 2030.
“I would say it's high,” Psillakis says about consumer appetite for EVs. “We launched the EQS, our electric vehicle sedan, at the end of last year. We have had a great seven month run with over 4,000 units being sold to US customers.”
For SUV and crossover focused customers in the U.S., that also means higher interest in electrified versions of those vehicles as well.
“And the demand already for our EQS SUV, as I said is coming September, it's pretty high,” Psillakis says. “Maybe that's also supported a little bit by the high gasoline prices making the electric vehicles much more competitive I would say at the moment, from a consumption point of view.”
Despite Mercedes buyers traditionally being in the upper income brackets, it seems higher gas prices might be weighing on their minds as well.
As for future electric models, Mercedes smaller EQB SUV will be arriving showrooms later this summer, with the EQE mid-size sedan on sale late this fall.
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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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