Mercedes-Benz Lowers Profit Outlook Amid China Sales Slump

Mercedes-Benz Group lowered its full-year profit outlook on Tuesday, reducing the return on sales forecast for its cars unit to 2% to 3% from a previous range of 3% to 5%. The German automaker now expects earnings before interest and tax to match the previous year's level of 5.82 billion euros, reversing an earlier projection of significant growth.

The company attributed the downgrade to a sharp decline in its largest market, China, where third-quarter deliveries fell 31% compared to the previous year. The company also expects higher material costs and expenses during the fourth quarter.

To address these financial pressures, the automaker plans to launch more than 40 new vehicles over the next two years. The company will also implement layoffs and relocate portions of its manufacturing from Germany to lower-cost locations, including Hungary.