Core Viewpoint - The traditional luxury car giants BBA (BMW, Mercedes-Benz, Audi) are facing significant growth challenges, with declining revenues and profits, particularly in the Chinese market, indicating a critical phase in their transformation efforts [1][2][4]. Financial Performance - In the first half of 2025, BBA's financial results showed a mixed performance: BMW led with €67.685 billion in revenue, down 8% year-on-year; Mercedes-Benz followed with €66.377 billion, experiencing the largest revenue drop of 8.6% and a net profit decline of over 50%; Audi was the only brand with revenue growth, reaching €32.573 billion, but its net profit was only €13.46 billion, one-third of BMW's [2][4][5]. - The overall net profit for Mercedes-Benz fell by 55.8% to €2.688 billion, while BMW's net profit decreased by 29% to €4.015 billion, and Audi's net profit dropped by 37.5% [7][8]. Market Challenges - BBA collectively struggled in the Chinese market, with delivery volumes declining by 15.5% for BMW, 14.2% for Mercedes-Benz, and 10.3% for Audi [4][6]. - The entry-level models of BBA are facing intense competition from domestic brands, leading to significant sales declines in the mid-range price segment [7][8]. Electric Vehicle Transition - The shift towards electric vehicles (EVs) is critical for BBA, with distinct strategies emerging: BMW is leading in EV sales, with 220,600 units sold in the first half of 2025, a 15.7% increase; Audi's EV sales grew by 32.3%, while Mercedes-Benz's EV sales fell by 14% to 87,300 units [9][12][13]. - Audi is cautiously pursuing electrification, planning to launch new internal combustion and hybrid models between 2024 and 2026, while BMW is focused on its new generation platform to boost EV sales [12][13][14]. Strategic Adjustments - BBA is adjusting its electrification goals, with Mercedes-Benz postponing its target for full electrification to 2030, aiming for a maximum of 50% of new models to be electric or hybrid by that year [14][15]. - The competitive landscape is shifting, with BBA needing to enhance their smart technology capabilities alongside their electrification efforts to regain their former market dominance [15].

Core Viewpoint - Mercedes-Benz Group reported a significant decline in financial performance for the first half of 2025, with sales revenue dropping by 8.6% year-on-year to €72.6 billion and net profit falling by 55.8% to €2.7 billion, marking the worst performance for the same period in five years [2] Financial Performance - Sales revenue for the first half of 2025 was €72.6 billion, down 8.6% compared to the previous year [2] - Net profit for the same period was €2.7 billion, a decrease of 55.8% year-on-year [2] Challenges Faced - The company cited weak global market demand, high costs associated with electrification, and ongoing supply chain issues as key factors impacting performance [2] - Despite a large-scale cost-cutting plan initiated at the beginning of the year, including layoffs of over 10,000 employees and project suspensions, these measures failed to offset the impact of declining sales [2] Market Competition - High-end vehicle sales remained relatively stable, but entry-level models and electric vehicles performed poorly, particularly in the face of intense competition from Tesla and Chinese brands in the European and American markets [2] Profitability Outlook - Currency fluctuations and rising raw material costs further squeezed profit margins [2] - Analysts indicate that the performance decline reflects a broader struggle among traditional automakers amid industry transformation, with market confidence in a short-term recovery for Mercedes-Benz being low [2] - Following the financial report, Mercedes-Benz's stock price fell by 3.5%, with a cumulative decline of over 20% for the year [2] - Industry forecasts suggest that if the consumer environment does not improve in the second half of the year, Mercedes-Benz may face its first annual loss in a decade [2]