Mercedes-Benz Pushes Plant Cost Cuts as China Deliveries Slide 31% and Buyback Rolls On

Mercedes-Benz pushes German cost cuts and buybacks as Q3 China deliveries fall 31% and the stock hovers near its 52-week low of EUR 38.90.

Mercedes-Benz is pressing ahead with a two-track autumn strategy: tightening the screws on domestic production costs while leaning on share repurchases to steady a stock that is hovering just above its yearly floor.

At the center of the cost debate, CEO Ola Källenius has turned to an internal benchmarking table that lays bare how much cheaper it is to build cars outside Germany. Production hours at the company's Tuscaloosa plant in the United States come in 17.9% below German levels. The gap widens sharply in Eastern Europe: Jawor, Poland, runs 76.5% cheaper, and the Cugir facility in Romania undercuts Germany by 81.7%. Management is presenting a strict savings program as unavoidable if the home-market plants are to be kept competitive.

That internal argument is unfolding against a backdrop of weakening demand. Group-wide passenger car and van deliveries totaled 491,700 units in the third quarter of 2026. Within the core Mercedes-Benz Cars division, passenger car sales fell 8% year on year to 407,200 vehicles. Battery-electric vehicles provided the one clear bright spot, with global BEV volumes jumping 52% to 78,100 units.

China's 31% Drop Weighs on the Quarter

The sharpest pain is concentrated in China, the group's single most important market. Deliveries there tumbled 31% to 86,800 cars. Across Asia as a whole, the decline reached 25%. Germany offered some relief, with sales rising 13% across all powertrain types, but that gain does little to offset the losses in the Far East.

Analysts have been trimming their expectations accordingly. Jefferies' Philippe Houchois kept a "Buy" rating on the stock but cut his price target to EUR 46 from EUR 52. He cautioned that European automakers are likely heading into a weak reporting season, leaving full-year forecasts exposed, and flagged the possibility of further provisions at Mercedes-Benz. Industrial-policy measures and EU protectionism, in his assessment, will arrive too late to deliver meaningful relief in 2026.

UBS had already moved a day earlier, lowering its target to EUR 45 from EUR 50 while maintaining a "Neutral" stance.

Buyback Keeps Running

Meanwhile, the company is putting its own cash to work in the market. Between October 5 and October 9, Mercedes-Benz repurchased another 910,000 of its own shares via Xetra. Since the program began in early September, the cumulative total has reached 4,761,805 shares.

The buyback has done little to lift the share price, which remains pinned near its 52-week low of EUR 38.90. The stock closed yesterday at EUR 39.23, a mere 0.8% above that trough, and has lost 35% since the start of the year. In today's session it slipped a further 1.2% to EUR 39.26.

October 28 Looms Large

The full picture of how badly the Chinese weakness has dented profitability will emerge on October 28, when Mercedes-Benz publishes its complete third-quarter 2026 report and holds the accompanying analyst call. Investors will be watching closely to see how much the margin-rich Chinese business has dragged on earnings — and whether the tougher line on production costs can gain traction with worker representatives.