Mercedes-Benz Feels the Aftershocks of Volkswagen's Profit Warning as Dealer Sell-Off Nears Completion
Published on 09/21/2026 at 06:40 | Editorial boerse-global.de
Volkswagen's dramatic profit warning rippled through European auto stocks on Friday, dragging Mercedes-Benz down 3.0 percent to close at EUR 44.55. The Stuttgart-based manufacturer's shares have now shed 26 percent since the start of the year, caught in a sector-wide selloff that laid bare just how deeply operational and structural pressures are cutting into Germany's automotive giants.
The trigger came from Wolfsburg, where Volkswagen slashed its expected operating margin for 2026 to no more than 1.0 percent — down from a previously forecast 4.0 to 5.5 percent. One-time charges of EUR 10 billion, largely tied to its Porsche subsidiary, forced the revision. According to Reuters, the resulting stampede out of auto stocks spread immediately to peers including Mercedes-Benz.
The scale of Volkswagen's restructuring hints at the broader industry reckoning. The company has reportedly set aside roughly EUR 16 billion for job cuts and possible plant closures, a figure that could translate into the elimination of around 50,000 positions worldwide. A preliminary agreement has also been reached to sell its Osnabrück facility to the state of Lower Saxony and Aurelius Capital, with plans to convert the site to defense production.
Pressure Builds Across the Supply Chain
The turbulence is hardly contained to the manufacturers themselves. Worker representatives at supplier Bosch demanded action from the European Union on Wednesday to counter job destruction, as the company plans to cut 13,000 positions in its core Mobility division by the end of the decade. Bosch pointed to intensifying Chinese competition, trade tariffs, and elevated manufacturing costs as the drivers.
Three German states with major automotive footprints escalated their own appeal to the federal government and the EU on Thursday, calling for faster support measures to help the sector navigate what they described as historic upheaval.
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Analysts have taken note. Berenberg lowered its price target for Mercedes-Benz from EUR 56 to EUR 52 in a sector study published Wednesday, maintaining a "Hold" rating. The private bank cited geopolitical risks, inflation, and above all conditions in the Chinese market as the key drags on the stock.
China's Slump Forces Guidance Cut
The Asian market has proven especially punishing for the Stuttgart carmaker. In the second quarter of 2026, Mercedes-Benz recorded a 30 percent decline in deliveries in China. Persistent consumer reticence prompted management in July to adjust its full-year outlook, with group revenue now expected to come in slightly below the prior year's level.
A safety recall added further disruption in mid-September, covering 23,606 GLE vehicles produced between 2022 and 2025 worldwide. The company cited a potentially incorrectly installed heat shield on the fuel line as the cause. Roughly 6,800 vehicles in Germany will need to be inspected at workshops.
Dealer Network Divestment Nears the Finish Line
Even as these headwinds mount, Mercedes-Benz is pressing ahead with its withdrawal from company-owned retail operations in Germany. Following the European Commission's approval in August for the sale of locations in Berlin and Brandenburg to British-based Global Auto Holdings, the group is preparing to complete the transaction by year-end. More than 1,100 employees are affected by the deal.
The move forms part of a broader reorganization announced in 2024 that encompasses roughly 80 dealerships across Germany. By gradually retreating from company-run sales, the automaker aims to streamline its operations and reduce fixed costs. Numerous locations have already been handed over to independent dealer groups in recent months. The initiative, however, is absorbing management bandwidth at a moment when the core operating business is showing visible signs of strain.
Product Offensive and Buyback Support
Despite the difficult market environment, Mercedes-Benz continues to push its model lineup forward. On Thursday, the company announced the official start of series production for the new GLA at its Rastatt plant. The manufacturer has also been supporting its share price through a buyback program launched roughly two weeks ago, with a volume of up to EUR 1 billion. Since that program began, the stock has lost 6.1 percent.
Bernstein Research, after meeting with CFO Harald Wilhelm, reaffirmed its EUR 56 price target. While the analysts see structural opportunities in exports, the burdens weighing on the company's key international markets remain the dominant concern for investors.
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