Porsche profit rebounds as Mercedes-Benz cuts outlook amid China struggles

Porsche reported a sharp rebound in operating profit for the first nine months of 2026, while Mercedes-Benz became the third major German carmaker to lower its full-year outlook, highlighting the divergent fortunes of German luxury automakers in a challenging Chinese market.

Profit and Sales

Porsche's operating profit surged to €1.74 billion in the first nine months of 2026, compared with just €40 million in the same period last year, when it booked around €2.7 billion in strategic restructuring costs Source: CNBC. However, sales revenue fell 5.9% to €25.28 billion, and deliveries dropped 16% to 178,532 vehicles. In contrast, Mercedes-Benz reported preliminary third-quarter core profit of €1.77 billion, with a profit margin of 2.5% in its car division, and cut its full-year profit outlook to flat at around €5.8 billion Source: Euronews.

China Exposure

Porsche has "significantly reduced our exposure to China," said CFO Jochen Breckner, noting that a geographically balanced sales footprint provides resilience Source: CNBC. Mercedes-Benz, however, saw its vehicle deliveries in China fall by a further 29% in the first nine months of 2026, after hitting their lowest level since 2016 last year Source: Euronews. Both companies face intensifying competition from Chinese domestic brands such as BYD, Geely, and Xiaomi.

Cost-Cutting Measures

Mercedes-Benz CEO Ola Kallenius has urged German employees to work additional hours without extra pay, while expanding production in Hungary, where costs are around 70% lower than in Germany Source: Euronews. Meanwhile, Volkswagen plans to cut 120,000 jobs worldwide by the end of the decade, in what would be the largest restructuring in automotive history Source: Euronews.