Mercedes bracing for huge transformation

SHANGHAI: German carmaker Mercedes-Benz is preparing for a "once-in-a-century transformation" set to reshape the automotive market, Mercedes chief executive Ola Källenius said on Wednesday.

"What is happening at the moment is a once-in-a-century transformation," Källenius said at the Auto Shanghai 2025 trade show.

This transformation was mainly driven by technology - digitalization, zero-emissions targets and automated driving, Källenius said.

The Mercedes chief executive said the company is investing more in technology, innovation, products and tools than ever before to keep up.

On the eve of the Shanghai motor show, Mercedes unveiled a long-wheelbase version of its CLA electric car designed for the Chinese market with a range of more than 860 kilometres - a launch described by Källenius as the largest product offensive in the next three years.

Efficiency is particularly important in this "once-in-a-century situation," in which so much capital is being freed up, Källenius said.

The Chinese market is incredibly competitive, while consumers were more hesitant over the past two years, the Mercedes boss noted.

Källenius said he expects consolidation among the numerous manufacturers on the Chinese market within the next five to 10 years.

Like many German carmakers, Mercedes has been struggling recently amid competition from Chinese manufacturers, reporting an annual sales slowdown of 7% for the first quarter.

Despite a 10% annual decline in first quarter sales in China, the market still accounted for more than one in three car sales for the firm.

Mercedes' group profit fell by over 28% in 2024 compared to the previous year, amounting to €10.4 billion ($11.4 billion). Revenue decreased by 4.5% to €145.6 billion.

For the current year, the carmaker expects even stronger headwinds and lower profits.

A slight decline in passenger car sales is also anticipated. In 2024, sales amounted to 1.98 million units.