The first quarter of 2026 presented a starkly divided picture for Mercedes-Benz. While a severe slump in China dragged down overall vehicle deliveries, robust demand for its most luxurious models and a surprising surge in electric vehicle (EV) orders provided crucial counterweights. This strategic balancing act will be under intense scrutiny as the company approaches key shareholder and financial reporting dates this month.
Global passenger car deliveries fell by six percent to 419,400 units in the first three months of the year. The primary culprit was a dramatic 27 percent sales collapse in China, a decline that accelerated from the previous quarter. This steep drop overshadowed positive performances elsewhere. The United States market proved resilient, with sales rising by a strong 20 percent. Gains were also recorded in Germany and the rest of Europe. Excluding China, the automaker would have posted a five percent increase in global deliveries.
The luxury segment emerged as a critical profit buffer against this volume decline. Sales of high-margin models soared, with the Maybach brand advancing by 22 percent and the G-Class by 16 percent. The SL model line saw an even more impressive jump of 47 percent. This shift toward more profitable vehicles is central to the company’s strategy of prioritizing value over volume.
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Perhaps the most unexpected positive signal came from the electric vehicle division, which had contracted by four percent in the full year 2025. Battery-electric vehicle (BEV) deliveries rebounded sharply, climbing 11 percent globally to 50,400 units in Q1. The new CLA model has been a standout success, driving a 34 percent increase in European EV sales and a 36 percent surge in its home German market. Production is already running on three shifts to meet demand, with order books filled well into the second half of 2026. Record pre-orders for the upcoming electric GLC further underscore this momentum. Electric vans also posted a robust 29 percent gain.
This mixed operational backdrop sets the stage for the company’s virtual Annual General Meeting on Thursday, April 16. Shareholders will be asked to approve a reduced dividend proposal, a direct consequence of last year’s profit decline. The company’s adjusted EBIT fell from EUR 13.7 billion to EUR 8.2 billion in 2025, leading to a proposed dividend cut from EUR 4.30 to EUR 3.50 per share. The ex-dividend date is set for April 17, with payment following on April 21.
The ultimate test of the quarter’s “fewer cars, but better” strategy will come with the release of the full quarterly report on April 29. Analysts will dissect whether the powerful luxury and EV mix was sufficient to protect profitability. Mercedes-Benz has previously targeted an adjusted EBIT margin of 11 to 13 percent for its cars division, with a goal of three to five percent specifically for its passenger car business in the current year. The stock, currently trading at EUR 53.97, remains approximately 13 percent below its January 3 high of EUR 61.93 as investors await these crucial margin figures.
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