The luxury automaker faces a defining stretch this week, bookended by a critical pre-close call on Monday and its Annual General Meeting on Thursday. Investors are confronting a stark regional divide in performance, with a severe slump in China overshadowing robust growth in Western markets. This split sets the stage for a shareholder vote on a reduced dividend and intense scrutiny of the company’s recovery plan.
Global vehicle deliveries for the first quarter of 2026 fell 6% year-over-year to 499,700 units. The primary driver of this decline was a dramatic 27% collapse in the crucial Chinese market, attributed by the company to intense competition, macroeconomic uncertainty, and pending model changes. This plunge dragged overall passenger car volume down by 6% to 419,400 vehicles.
In sharp contrast, other key regions posted strong gains. Deliveries in the United States surged by 20%, while Europe saw a 7% increase and the German home market grew by 9%. Excluding China, Mercedes-Benz would have recorded a 5% global increase in passenger car sales for the quarter.
The electric vehicle segment provided a consistent bright spot. Worldwide deliveries of battery-electric vehicles (BEVs) rose by 11% to approximately 44,300 units, with Europe leading the charge with a 34% jump. The new all-electric CLA model has been a significant driver in Europe, and the electric GLC reportedly saw record order intake. Across Europe, electrified vehicles—combining BEVs and plug-in hybrids—accounted for 41% of sales.
This mixed operational picture follows a difficult 2025 financial year, where adjusted EBIT fell from €13.7 billion to €8.2 billion. New tariffs, unfavorable exchange rates, and the price war in China heavily impacted profitability. Consequently, the board is proposing a dividend of €3.50 per share for the 2025 fiscal year, a cut of 80 cents from the prior year. Shareholders will vote on this payout at the virtual AGM on Thursday, April 16.
To shore up margins and target an operating return on sales of 3-5%, management is implementing aggressive cost-saving measures. A comprehensive program aims to save more than €3.5 billion this year, which includes the planned closure of its Aguascalientes plant in Mexico by May, removing roughly 100,000 units of capacity.
The company is also supporting its share price through ongoing buybacks. By early April, it had already repurchased 13.6 million of its own shares. This is part of a program with a remaining volume of up to €1.7 billion, which saw over 400,000 additional shares acquired in early April.
Analysts remain cautious. UBS recently trimmed its price target from €58 to €57, maintaining a “Neutral” rating due to persistent margin pressure from pricing competition and investments in the model offensive. The stock has lost over 13% since the start of the year, currently trading around €53.49.
The company has framed 2026 as a transitional year, expecting momentum to build in the second half with new models like the updated S-Class and further CLA derivatives. The first true test of this projected operational recovery will come on April 29, when Mercedes-Benz releases its full first-quarter report.
