Mercedes-Benz Group profits jump in 2022, outlook cautiously stable

Published February 19th, 2023 - 08:23 GMT
Mercedes-Benz outlook stable
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ALBAWABA — Mercedes-Benz Group on Friday reported a jump in profits and annual earnings of 20.5 billion euros for 2022 thanks to strong demand for high-end and electric models, especially in China.


"The overall Chinese market is bigger than all of Europe and North America put together," Ola Källenius, Mercedes-Benz chief executive officer, told CGTN.


"It's no surprise the Chinese market is also the most important market for Mercedes. We sell somewhere between 35 and 40 percent of our vehicles in China," the German automaker’s CEO added.


The Stuttgart-based group sold 2,043,900 cars in 2022, a 5 percent increase year-on-year, driven by strong demand for the S-Class model and the all-electric EQS.


"It was indeed a very financially robust year for Mercedes-Benz. The secret of our success comes down to the products, technology and products and very attractive portfolio," said Källenius. "We also launched a new range of electric vehicles that have been received by the market very, very well. And if you marry that with discipline on managing the margin side and on the cost side, we have, in a challenging environment, delivered very good results."


Net profit jumped 34 percent to 14.8 billion euros last year while revenues were up 12 percent year-on-year to 150 billion euros.

Källenius warned of a sluggish start to 2023 in Europe, saying "incoming orders are more sluggish", but at the same time expecting revenues to remain stable and pre-tax profits to come in slightly below last year.


The global economy faces "an exceptional degree of uncertainty", Källenius said, citing the war in Ukraine, the fallout from Covid restrictions in key market China and inflationary pressures with higher interest rates among the challenges ahead.


"If we look at 2023, we think that we will see a gradual easing of the supply chain constraints. We’re not out of the woods completely yet but we expect that to get better, " Källenius said. "But coming off such a strong year in 2022, we are still guiding for a healthy profitability level."


Harald Wilhelm, Mercedes’ chief financial officer, told analysts and reporters that reducing costs was “not a walk in the park” given inflationary pressures but that the company was sticking to a cost reduction target from 2019 levels of 20 percent by 2025.


Meanwhile, in an effort to push towards net zero emissions the German government in October approved a plan to speed up state building approvals of charging stations and allocated 6.3 billion euros to increase the number of stations across the country.


"To speed up the change (to electric vehicles), we need to be sure that the charging station infrastructure is being built up," Källenius told Bild am Sonntag on Sunday. "That's also a question for politics."


The future of the car is electric, Källenius said, adding that by the end of this decade the company wanted to be ready to completely transition to electric cars wherever market conditions allow.


"It's not a foregone conclusion, rather it will require a gigantic industrial conversion," the CEO noted.


Shares on Friday closed up 2.84 percent at 74.64 euros at 1741 GMT.



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