Mercedes-Benz Group shares dropped by as much as 8.4% on Friday last week, marking their steepest decline since 2020, after the automaker cut its outlook due to a deepening slowdown in China, particularly impacting sales of its high-end models like the S-Class and Maybach. The company now expects lower returns for its core car unit and significantly reduced earnings compared to the previous year. This profit warning reflects broader challenges in Germany’s automotive industry, with competitors like BMW and Volkswagen also facing struggles amid China’s economic downturn and sluggish electric vehicle sales. Mercedes plans a sales push in China, but younger consumers are increasingly favoring local brands with better digital technology. The company is also recalling over 520,000 vehicles in China due to a malfunctioning wheel speed sensor. European sales are under pressure, with Mercedes deliveries down 13% in August, further complicating efforts to meet upcoming EU emissions regulations.