Mercedes-Benz Group AG

China remains the dominant challenge (cyclical + structural), but it’s not going away - Chinese market down >20% YoY; premium segment declining for 3+ years and top-end hit hardest. - Competition intensifying: 100+ players driving down prices; export spillover to other markets. - Management response: protect profitability/operating point via stable high ASP (Mercedes highest average selling price among competitors), accepting lower volumes; capacity and cost adjustments in China, with variable cost initiatives starting to pay off (benefits take time). - Strategic stance: China will remain a major pillar; company explicitly rejecting the idea of treating China as “going away”.

China strategy: shift to a more locally sourced model + BEV ramp signals optimism - Move away from the prior “hybrid” China business model: aim for almost everything in China for Chinese production. - First vehicle under the new strategy: electric E-Class in H2 2027 (and continuing beyond). - Early demand signals: newly launched electric GLC showing healthy orders at chosen price point; currently top model only—more variants (incl. six-seater) expected to improve competitiveness.

Germany competitiveness actions + productivity restructuring; workforce measures restarted - Germany is ~15% of sales but ~2/3 of employees/structures are based there—so cost competitiveness is critical. - Decide to restart the severance program in Germany in December (details subject to ongoing labor discussions). - Launch comprehensive productivity initiative in Germany; additional investment depends on a significant productivity gain. - Opportunity: Eastern Europe (e.g., Hungary) to reduce European cost base; already a strong presence in Hungary.