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Investing.com — Mercedes-Benz Group AG (ETR:MBGn) says it expects demand for its cars to “outstrip” supply in its current financial year, as the German luxury carmaker lifted its guidance for annual core earnings despite concerns over the availability of semiconductors and soaring inflation.
In a statement, the firm said the full-year margin outlook for its vehicles would be in the range of 13-15%, up from 12-14% previously.
This led Mercedes to predict that group earnings before interest and taxes will now come in “significantly above” the results from last year. Its prior estimate saw growth at “slightly above” 2021 levels.
The upgrade comes after Mercedes reported a sharp rise in earnings in the third quarter as sales of the group’s luxury and electric cars helped overcome ongoing disruptions to the supply of key chip parts.
Group EBIT during the period surged by 83% to 5.2B euros, ahead of consensus estimates, while revenue increased by 19% to 37.72B euros.
However, the Stuttgart-based company warned of an “exceptional degree of uncertainty” around the economic forecast, citing supply constraints, as well as a spike in the cost of energy and raw materials.
“[T]he continued very high inflationary pressure for consumers and companies and the associated central bank increases in interest rates as well as ongoing bottlenecks in global supply chains make the outlook more difficult,” it flagged.
Continued COVID-19 lockdowns in China may also lead to unforeseen developments in the auto market, Mercedes said.
It added that while its figures have not yet taken into account the future effects of the war in Ukraine, any escalation in the conflict beyond its current state “could possibly have substantial negative consequences” on its operations.
