Mercedes Posts Profit by Pushing Prices Higher

Mercedes-Benz Group AG boosted it net income by 3% in the first quarter, thanks to strong pricing, even as COVID-19, the semiconductor shortages and the war in Ukraine continued to impact the company. 

Mercedes-Benz Group AG – Annual Results Conference 2021, StuttgartMercedes-Benz Group AG – Annual Results Conference 2021, Stuttgart
Harald Wilhelm, left, Mercedes-Benz Group CFO, said the company’s product pricing played a critical role in driving profits.

“In this challenging environment resilience and pricing power are crucial,” said Harald Wilhelm, Mercedes-Benz Group chief financial officer. 

“Our sharpened focus is desirable top-end and electric vehicles, combined with ongoing cost discipline allowed us to deliver strong earnings despite numerous headwinds. One this foundation we continue to transform our business by growing our luxury business and scaling up production of electric vehicles and accelerating software development.” 

The automaker earned $3.9 billion in the first quarter, compared to $3.74 billion in the same period the previous year, while revenue increased 6% to $37.6 billion during the first three months of the year. Earnings adjusted before interest and taxes increased 19% to $5.7 billion and its adjusted return on sales increased to 16.4% from 12.6 percent. 

Mercedes brands unit sale shrink in first quarter 

Mercedes EQXX efficiency drive front
Mercedes-Benz’s EQXX traveled 621 miles on a single charge, setting a new standard for efficiency.

Mercedes Benz posted the strong results even though sales of Mercedes-Benz Cars decreased by 10% due to the bottlenecks in the supply of semiconductors due to the COVID-19 lockdowns in China. As well as the war in Ukraine. Nonetheless, the division’s revenue increased by 8% due to the company’s pricing power. 

The company’s financial report for the first quarter also noted the company asserted its claim to leadership in electric vehicles by driving more than 1,000 kilometers or 600 miles on a single charge under real-world conditions in the EQXX. 

The war in Ukraine, however, has created uncertainty across Europe and disrupted business across the European continent. In the wake of Russia’s attack on Ukraine, Mercedes-Benz suspended the export of passenger cars vans and spare parts to Russia and halted local manufacturing inside Russia. 

The company is in close contact with suppliers that have exposure to Ukraine with a view to safeguarding supply chains by transferring to other locations outside Ukraine and Russia. 

In other parts of Europe, including those in Germany, Mercedes-Benz also has adapted shift plans at some plants to avoid downtime at some plants and maintain production.


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