The latest grim installment in the increasingly unhappy German auto industry saga involves . The company has endured a tough couple of years, with net income falling from €14.5bn in 2021 to €5.1bn in 2025, as it has found itself bedeviled by high production costs in Germany (in no small part the product of the ) and in Europe, China, and elsewhere. The company’s stock is down around 30 percent in 2026.
A couple of weeks ago, Mercedes reduced its outlook for this year blaming, among other factors, “a more challenging market environment in China.” More challenging? It was already bad enough. In 2020, the company sold over 750,000 cars there. By 2025, that had shrunk to 525,000, as Chinese consumers opted for domestically made (often electric) cars. That trend has been accelerated by China’s troubled economy.
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