Mercedes-Benz Leans on Buybacks as Cost Gap and China Slump Test Its German Plants

Mercedes-Benz repurchased 910,000 shares from Oct 5-9, bringing its total to 4.76 million since Sept 1, as Q3 China deliveries fell 31%.

Mercedes-Benz kept its foot on the accelerator of its share repurchase program last week, picking up another 910,000 of its own shares on the open market between October 5 and October 9. Since the buyback kicked off on September 1, the Stuttgart-based automaker has now accumulated 4,761,805 shares in total — a steady deployment of cash that runs alongside a far bumpier operating story.

The stock has had a bruising year. It closed Monday's session at EUR 39.23, down 1.3% on the day, leaving it 35% weaker since the start of 2026. By Tuesday's trading the shares had slipped a further 1.2% to EUR 39.26, hovering just above a 52-week low of EUR 38.90. That thin cushion above the yearly floor underscores how much pressure the equity is under.

A Split Quarter: EVs Surge, Core Cars Retreat

Third-quarter deliveries laid bare the two-speed nature of the business. Group-wide, Mercedes-Benz moved 491,700 passenger cars and vans worldwide. Within the core Mercedes-Benz Cars division, however, shipments fell 8% year on year to 407,200 vehicles.

Alternative drivetrains told the opposite story. Fully electric passenger car deliveries jumped 61% from a year earlier to 68,400 units, and once the van division is included, battery-electric vehicles notched a 52% global sales increase for the quarter. That resilient appetite for EVs stands in sharp contrast to the broader cooling across the conventional segment, which still accounts for the bulk of total volume.

China's 31% Slide Casts a Long Shadow

The regional picture is where the strain concentrates. Passenger car deliveries in China tumbled 31% to 86,800 units, dragging the wider Asian region down 25%. Germany offered some relief, with home-market sales across all drivetrains climbing 13%, but that gain does little to offset the damage in the Far East.

Analysts have been recalibrating accordingly. Jefferies' Philippe Houchois kept a "Buy" rating on the stock while trimming his price target to EUR 46 from EUR 52, warning that European manufacturers appear headed for weak quarterly results and that full-year expectations remain fragile. He also flagged the possibility of further provisions at Mercedes-Benz, noting that EU industrial-policy initiatives and protectionism are arriving too late to deliver meaningful relief in 2026.

Deutsche Bank Research, for its part, reaffirmed its "Buy" call on October 8 with a EUR 70 target, though it pointed to lingering risks in the Chinese market and in the company's sales mix as the next set of numbers approaches.

Källenius Turns Up the Heat on German Costs

Behind the delivery figures, a sharper internal battle is brewing. CEO Ola Källenius is ratcheting up pressure on the company's German plants, putting stark international cost disparities on the table in talks with the workforce. An internal breakdown shows production-hour costs running 17.9% below Germany at the US plant in Tuscaloosa, 76.5% lower at Jawor in Poland, and a striking 81.7% cheaper at Cugir in Romania. To keep the home-market sites viable, management is framing a stringent savings drive as unavoidable.

Whether that tougher line on production costs can spark a turnaround hinges heavily on reaching an agreement with labor representatives. Investors will get a clearer read on the financials when Mercedes-Benz publishes its third-quarter 2026 interim report on October 28, with management set to discuss the results at an analyst conference the same day.