Mercedes-Benz said its core passenger car business saw sales fall in the first quarter of 2026, with total deliveries down 6% year-on-year to 419,400 vehicles. The German premium automaker cited a difficult environment in China as the primary headwind, even as regional sales trends diverged.
Volume performance varied by region. In Europe, Mercedes reported a 7% increase in sales, while the United States registered a 20% rise. These gains, however, were insufficient to counteract a sharp 27% plunge in deliveries in China, the company said.
Mercedes and its rival BMW are operating in a fiercely competitive pricing environment in China, where local brands have intensified pressure on foreign premium automakers. The company described 2026 as a "transition year" for its operations in China, attributing part of the overall decline to the deliberate phase-out of models in its entry segment while new models are prepared for launch.
The automaker framed the drop in quarterly deliveries as tied to this lineup overhaul in China rather than uniform weakness across its global business. Management highlighted that the timing of model phase-outs and upcoming introductions in the entry segment contributed materially to the region's year-on-year sales decline.
Overall, Mercedes emphasized the mixed regional picture: solid increases in Europe and the United States contrasted with the sizable contraction in China. The company did not provide additional details about the specific models being retired or the exact launch schedule for the replacements.
Market dynamics in China - described by Mercedes as particularly challenging - include intensified price competition from local manufacturers, a factor the company and peers say is reshaping demand and market share patterns among premium brands. Mercedes' acknowledgment of 2026 as a transition year signals an expectation that the near-term hit to volumes in China is connected to product-cycle timing rather than an across-the-board sales collapse.
Quick summary
- Global deliveries fell 6% in Q1 2026 to 419,400 vehicles.
- Sales rose 7% in Europe and 20% in the U.S., but fell 27% in China.
- Mercedes calls 2026 a "transition year" in China as entry-segment models are phased out ahead of new launches.