Mercedes profits rise on higher prices

Mercedes profits rise on higher prices

Mercedes profits rise on higher prices

German automaker Mercedes-Benz said yesterday that higher sales prices enabled it to lift its bottom line slightly in the first three months of the year, despite a shortage of semiconductors and fallout from the war in Ukraine.

Mercedes-Benz said in a statement that it booked net profit of 3.6 billion euros ($3.8 billion) in the period from January to March, an increase of three percent over the same period last year.

Underlying or operating profit rose by 11 percent to 5.2 billion euros on a six-percent increase in revenues to 35 billion euros.

The Stuttgart-based carmaker said its results were boosted by a “sharpened focus on top-end vehicles and premium vans, combined with ongoing cost discipline... even as the Covid-19 pandemic, semiconductor supply-chain bottlenecks and war in Ukraine continued to impact business.”

Mercedes-Benz said unit sales of its cars were down by 10 percent at around 487,000.

Over the past year, automakers have been battling shortages in semiconductors, electronic components that are used in both conventional and electric vehicles, occasionally being made to halt production.

The war in Ukraine has similarly aggravated the supply-chain disruptions faced by manufacturers.

Like rivals BMW and Volkswagen, Mercedes-Benz stopped exports to Russia and closed production sites in the country, leading to related expenses of 709 million euros in the first quarter.

Looking ahead, Mercedes-Benz said the outlook was clouded by “exceptional degree of uncertainty,” particularly the impact of the war on “supply chains, and the development of prices for raw materials and energy.”

Mercedes said it expected shortages, including of semiconductors, “to impact business for the remainder
of 2022.”