Strategic Failure = Losing Money
I have been constantly pointing out Mercedes' revenue and profitability losses over the past 2-3 years. These losses occurred due to Mercedes' strategic failure.
The
Mercedes-Benz Group increased its net profit by 34% to
€14.8 billion in
2022, thanks to its strong model mix and implementation strategy. Group EBITDA (earnings before interest and taxes) rose by 28% to €20.5 billion, and total revenue increased by 12% to €150 billion.
Mercedes-Benz Group generated total revenue of €153.2 billion in
2023, an increase of 2.1%, while net profit decreased slightly to
€14.5 billion (reported between €14.3 and €14.53 billion).
BMW Group reported a successful
2023 with record revenues of €155.5 billion (up 9% year-on-year) and strong operating results, driven by high-end models and electric vehicles. While net profit dropped to
€12.2 billion (about a third less than 2022) due to the absence of 2022's one-time Brilliance consolidation gain, the company remains highly profitable.
Mercedes-Benz's net profit for
2024 fell by approximately 28% year-on-year to
€10.4 billion, primarily due to declining demand in the Chinese market and rising production costs.
BMW Group's
2024 annual net profit fell by 36.9% to
€7.68 billion ($8.32 billion), driven by a challenging market in China and increased warranty costs from a massive brake system recall. Global EBIT decreased by 37.7% to approximately 11.5 billion euros, while revenue dropped 8.4% to €142.38 billion for the year.
Mercedes-Benz announced that due to fierce competition in China, US tariffs, and rising costs, its operating profit will fall by 57% to
€5.8 billion in
2025, and net profit will decrease by approximately 49% to €5.3 billion.
BMW reported that in
2025, due to tariffs and declining sales in China, its net profit fell by 3% to
€7.45 billion, and its operating profit decreased by 11.5% to €10.2 billion. According to PistonHeads, despite a €2.5 billion cost reduction, revenues fell to €133.5 billion.
Mercedes made more money by selling fewer cars. I think BMW ended up losing more money.