Mercedes-Benz Shares Sink to 12-Month Low as Labor Strife Compounds China Headwinds

Mercedes-Benz shares fall to €43.01 low as labor conflict, China demand slump, and end of buyback program weigh; Bernstein maintains €61 target.

Mercedes-Benz shares closed at €43.13 on Friday, touching a fresh 52-week low of €43.01 as the automaker grapples with a deteriorating operating environment on two fronts: an intensifying labour dispute at home and persistent demand weakness in China. The stock has now surrendered almost 30% of its value since the start of the year.

The depth of the sell-off follows confirmation that the company's share buyback programme, which had provided a steady source of demand, ended on 1 June. Under the initiative, Mercedes-Benz repurchased 37.6 million of its own shares at an average price of €53.19 per share — roughly 19% above the current market price. With that prop removed, the equity has been left exposed to the full force of negative sentiment.

Workers push back as management demands concessions

At the heart of the internal friction is a plan by the board to delay a special bonus payment for around 90,000 employees from July 2026 to April 2027, with media reports suggesting the payout could be cancelled altogether. Management is also pushing for a return to a 40-hour working week from the current 35-hour arrangement, offering no salary compensation for the extra hours. The works council has labelled the proposals irresponsible and vowed to fight them.

The clash comes as the group pursues its "Next Level Performance" cost-cutting programme, which targets annual savings of €5 billion. The executive board cites headwinds in China, the threat of new trade restrictions, and the high cost of the German manufacturing base as the rationale for the measures. Without a resolution on personnel costs, achieving the savings target looks increasingly uncertain.

Operational numbers tell a mixed story

Despite the market's pessimism, Mercedes-Benz delivered a solid first-quarter performance. Revenue reached €31.6 billion, free cash flow in the industrial business stood at €1.86 billion, and net industrial liquidity edged up to €33.8 billion. Sales growth in Europe (7%) and the US (20%) partially offset the drag from China, where competitive intensity and soft demand continued to weigh.

Yet the adjusted automotive margin slipped to 4.1% — within the full-year guidance range of 3-5% but at the lower end of comfort. The margin compression is a direct consequence of the China headwind and helps explain the board's urgency in cutting costs.

Technical picture weakens further

From a chart perspective, the stock is in deeply oversold territory. The relative strength index registered 28.4 at Friday's close, and the price sits more than 12% below its 50-day moving average and more than 21% below the 200-day line. Annualised 30-day volatility of 28.78% suggests choppy trading lies ahead.

A handful of analysts remain calmer than the market. Bernstein Research has reiterated a €61 price target, betting on a pipeline of new models such as the next-generation GLC to revive momentum. Still, the immediate focus is whether the 52-week trough of €43.01 can hold. A sustained break below that level would darken the already gloomy technical outlook.

What to watch next

The next significant catalyst comes on 14 July, when Mercedes-Benz will hold its pre-close call covering second-quarter trading. Full quarterly numbers are due on 28 July. Investors will be watching closely whether the operational margin can be defended as the China headwinds persist and the labour conflict shows no sign of easing.