Mercedes-Benz recalls half a million cars

The vehicles affected include almost 250,000 imported cars of the A-Class, B-Class, CLA and GLA models produced between August 30, 2011 and April 3, 2019

Admin I Friday, September 20, 2024

BAVARIA – German auto giant Mercedes-Benz is recalling more than half a million cars in China due to a technical defect.

The Chinese market regulation authority said on Friday that the company has presented a recall plan which is due to take effect from November 27. The affected cars have an issue with their wheel speed sensors’ resistance to moisture.

Prolonged use in hot and humid conditions could result in malfunctions and impact the cars’ electronic stability control and anti-lock braking systems (ABS).

A Mercedes spokesman confirmed the recall. According to the Chinese authority, the vehicles affected include almost 250,000 imported cars of the A-Class, B-Class, CLA and GLA models produced between August 30, 2011 and April 3, 2019.

Also affected were around 280,000 GLA models manufactured in China between March 13, 2014 and October 12, 2019.

The recall comes just a day after Mercedes-Benz lowered its earnings forecast for 2024, citing weak business in China.

Lowers sales forecast

Meanwhile, Mercedes-Benz on Thursday lowered its guidance for the 2024 financial year, citing a deterioration of its business in China. The company now expects annual earnings before interest and taxes (EBIT) to be significantly below the prior year’s level, whereas it had previously anticipated a slight decline compared to the prior year.According to the Stuttgart-based firm, China’s gross domestic product growth has lost further momentum due to weaker consumption and an ongoing downturn in the real estate sector.

This decline has impacted overall sales volume in China, including the Top-End segment. As a result, the sales mix for the second half of 2024 is anticipated to remain consistent with the first half, but weaker than originally projected.

Additionally, the second half of 2024 is expected to face various valuation adjustments, and the dynamic pricing environment is likely to persist.

Consequently, Mercedes-Benz Group has revised its full-year outlook. Mercedes-Benz Cars now expects annual adjusted Return on Sales to be between 7.5% and 8.5% compared to the prior outlook of 10% to 11%.

Mercedes-Benz Vans’ expected adjusted Return on Sales remains unchanged at 14% to 15%, while Mercedes-Benz Mobility’s expected adjusted Return on Equity remains at 8.5% to 9.5%.

The free cash flow of the industrial business for the Mercedes-Benz Group is now expected to be significantly below the prior year’s level, compared to the previous expectation of a slight decline.