Mercedes-Benz recorded a strong uptick in revenue in the first quarter of 2023 thanks to a significant rise in sales of its top-end vehicles – most notably, the rugged G-Class, the high-performance AMG models, and the ultra-premium Maybach cars.
In shifting focus to these products, which are the most profitable, Mercedes managed to outperform its Q1 2022 results despite unfavourable market conditions.
“Our focus on top-end cars and premium vans has made Mercedes-Benz more weatherproof, allowing us to accelerate our digital and electric transformation – even in a period of economic uncertainty,” said Harald Wilhelm, Chief Financial Officer of Mercedes-Benz Group.
“Ongoing cost discipline, combined with further key product launches like the all-electric Mercedes-Maybach EQS SUV will keep us on track to continue delivering sustainable results.”
Together with higher unit sales, the group – which consists of the Cars, Vans, and Mobility subdivisions – registered Earnings Before Interest and Taxes (EBIT) of €5.5 billion (R111 billion), up from €5.2 billion (R105 billion) year-on-year.
First-quarter revenue then increased to €37.5 billion (R759 billion), compared to €34.9 billion (R706 billion) in Q1 2022, and adjusted EBIT rose to €5.4 billion (R109 billion), compared to €5.3 billion (R107 billion).
“Strong sales of G-Class, Mercedes-AMG, and Mercedes-Maybach vehicles helped Mercedes-Benz Cars to achieve an adjusted Return on Sales (RoS) of 14.8%,” said the company in its Q1 financial report.
The automaker’s premium Vans segment also played a role in boosting profitability with an RoS that reached 15.6%.
Q1 2023 vs Q1 2022 passenger car sales
The Mercedes-Benz Cars division reported 503,483 sales in Q1 2023, an uptick of 3% “despite ongoing supply-chain disruptions, economic headwinds, and geopolitical uncertainty,” it said.
Even more impressive, battery-electric vehicle (BEV) sales skyrocketed by 119% – with electric vehicles now accounting for over 10% of passenger car sales.
The AMG subsidiary also enjoyed an uptick in sales of 44% to 40,330 units, the “Entry” passenger car segment grew by 27%, and the “Top-End” segment gained 18%.
The “Core” category, on the other hand, which includes models like the GLC and E-Class, saw a decline of -11% to 248,383 units sold.
| Mercedes-Benz Cars | Q1 2023 | Q1 2022 | Change 23/22 |
|---|---|---|---|
| Sales in units | 503,483 | 487,008 | +3% |
| – Thereof xEV | 91,698 | 74,000 | +24% |
| – Thereof BEV | 51,639 | 27,360 | +89% |
| Revenue in millions of € | 27,812 | 25,836 | +8% |
| EBIT in millions of € | 4,148 | 4,271 | -3% |
| RoS in % | 14.9 | 16.5 |
Outlook for 2023
Mercedes-Benz expects the world economy to remain subdued for the upcoming financial year, but that factors that have impeded car production in the years prior, such as global supply chain bottlenecks and volatile energy prices, will have less of an impact.
In Europe, the manufacturer anticipates that sales will remain “sluggish”, in the United States it sees demand remaining “on a good level”, and in China it is preparing for a return in momentum and “good order intake.”
As such, it’s projecting an RoS of 12-14% for the Cars division, an RoS of 11-13% for the Vans division, and an RoE of 12-14% for the Mobility division.
In total, the Mercedes-Benz Group expects revenue and cash flow to match 2022FY levels, but EBIT to fall below.
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