Mercedes-Benz's Balancing Act: Dealership Divestments, EV Ambitions, and the Weight of China
Published on 08/16/2026 at 14:11 | Redaktion boerse-global.de
The Stuttgart automaker is executing a delicate high-wire act these days, shedding physical retail infrastructure in Germany while simultaneously pouring resources into an electric future. The contrasting moves underscore a company in transition—one foot planted in its combustion-engine heritage, the other stepping firmly toward electrification, all while navigating a bruising slowdown in its most critical market.
Brussels Clears the Path for Retail Restructuring
European regulators have given the green light to a significant reshaping of Mercedes-Benz's German dealership footprint. The EU Commission approved the sale of seven company-owned showrooms—five in Berlin and two in neighboring Brandenburg—to UK-based Global Auto Holdings, a transaction that touches more than 1,100 employees. The Tagesspiegel reported that Brussels raised no competition concerns, and the deal is slated to close by the end of 2026.
The divestment is part of a broader reorganization of the automaker's retail network across Germany, a strategic retreat from direct ownership of showrooms that mirrors moves by other legacy manufacturers seeking to trim fixed costs.
Two Worlds, One Strategy
The dealership sale tells only part of the story. Over the weekend, Mercedes launched its official teaser campaign for the first fully self-developed, all-electric performance SUV under the AMG banner—a clear signal that the performance division's future isn't solely defined by thunderous V8s.
That said, the company isn't abandoning its combustion heritage just yet. Klaus Rehkugler, head of product management, confirmed on Friday that V8 engine production will continue at least through 2035, though he explicitly ruled out bringing the eight-cylinder back to the C-Class lineup. The commercial vehicle arm is also pushing forward: Mercedes-Benz Trucks recently expanded its electric portfolio with the eActros Lowliner, designed for volume transport and equipped with LFP cell technology and an 800-volt electrical architecture.
Should investors sell immediately? Or is it worth buying Mercedes-Benz?
This simultaneous commitment to both powertrain philosophies illustrates the tightrope Mercedes is walking as it manages the industry's longest-ever transition.
The China Problem in Numbers
The strategic maneuvering unfolds against a backdrop of deteriorating financial performance. Second-quarter revenue slipped to €32.1 billion, while reported EBIT came in at €1.55 billion—a figure that absorbed a €704 million impairment charge on a Chinese joint venture. Passenger car deliveries fell 7.9 percent to 417,765 units, with the China market alone down 30 percent.
The damage prompted a rare guidance cut. Management now expects full-year results slightly below prior-year levels, rather than the previous outlook of matching last year's performance, citing intensifying competition in the world's largest auto market.
Analyst reactions have been split. RBC Capital Markets nudged its price target up from €53 to €54 on Thursday while maintaining a neutral "Sector Perform" rating. The broader analyst community remains divided, with price targets spanning a wide range—reflecting genuine uncertainty about when, or whether, Chinese demand will stabilize.
A Van-Sized Bright Spot
Not every division is struggling. The vans business delivered a counterpoint to the passenger car weakness, with sales rising to 94,100 units and revenue climbing 5 percent to €4.46 billion. The segment's adjusted return on sales reached 10.2 percent, a stark contrast to the passenger car division's adjusted margin of 4.0 percent—which, while thin, still managed to beat the consensus estimate of 3.5 percent.
The GLC L EV Conundrum
The fragility of any China recovery is perhaps best illustrated by the GLC L EV, the long-wheelbase electric SUV tailored for the Chinese market. When orders opened on July 8, the model attracted 12,000 pre-orders within 24 hours—an encouraging sign of pent-up demand. Yet in its first full month, only 1,438 vehicles were actually registered. The chasm between reservations and real-world deliveries suggests either supply constraints or lingering consumer hesitation are impeding the conversion of interest into sales.
Mercedes-Benz at a turning point? This analysis reveals what investors need to know now.
Cost-Cutting and Legal Wrinkles
Away from the showroom floor, the company is quietly shrinking its administrative ranks. Between April 2025 and the end of March 2026, roughly 5,500 employees accepted voluntary severance packages from a program targeting about 40,000 non-production staff, with some payouts exceeding €500,000.
On the legal front, Mercedes secured a largely favorable first-instance ruling in July in the UK diesel emissions litigation, with another hearing scheduled for October. The company also held exclusive talks with BNP Paribas regarding the sale of its Athlon leasing subsidiary for approximately €1 billion, with a deal targeted for the third quarter.
A Stock Near Its Lows
The market's verdict on all this activity is visible in the share price. The stock closed Friday at €45.99, roughly 26 percent below its 52-week high of €62.30 set in December. Year-to-date losses stand at 24 percent, and the shares trade about 14 percent beneath their 200-day moving average of €53.24—technical evidence of a persistent downtrend. The distance to the 52-week low of €42.64 is a mere 8 percent.
All eyes now turn to October 28, when Mercedes-Benz releases third-quarter figures. The numbers will reveal whether China's weakness is deepening or showing the first tentative signs of stabilization—and whether the company's carefully calibrated bet on both combustion and electric futures can hold up under pressure.
Ad
Mercedes-Benz Stock: New Analysis - 16 August
Fresh Mercedes-Benz information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
