Among other factors, higher sales in Malaysia to thank for Mercedes-Benz Q2 profit increase.
Mercedes-Benz Group AG has just announced that they have achieved a strong profit for the second quarter of the year and credit a few different factors for this upward tick in earnings in their own release linked here.
Among the reasons they listed were a high demand for luxury vans, a diverse model mix, enhanced pricing power as well as ongoing cost discipline. We would like to add one more factor to this list, a surge in sales right here in Malaysia.
While a bit more obscure, it did play a part in the recent success of Mercedes-Benz. This could be caused by the sales tax exemption that was in effect here at home and thus, we as Malaysians leaped at the opportunity. Who can resist a good bargain, right?
To fully enjoy these tax exemptions of 100 percent on locally assembled cars and 50 percent on imported cars, one would simply have to book a car by 30 June 2022. Anything after that was subject to the new tax system.
Thus, a frenzy of thrifty car buyers arose from the woodworks to enjoy these massive price dips and much like every other car brand in Malaysia, Mercedes-Benz reaped the sweet benefits.
Adjusted Return on Sales for Mercedes-Benz in the second quarter rose by 14.2 percent and 10.1 percent for Mercedes Vans. This is quite the achievement despite some current issues faced by the car community such as lockdowns due to the global pandemic, semiconductor shortages and the war in Ukraine.
Moreover, Mercedes-Benz also reports that their group revenue went up by 7 percent to €36.4 billion and adjusted EBIT was up 8 percent to €4.9 billion.
It was also stated that the company’s focus on Top-End Luxury vehicles, battery electric vehicles (BEVs), and premium vans as well as an unwavering commitment to cost efficiency helped offset the overall lower sales and rising cost of raw materials.
However, now that the tax exemptions are no longer available and we Malaysians are now left with no choice but to pay even more for cars despite the cost of most cars already leaving us in shock, I think we will see a slight decrease in car sales over the next year or possibly longer.
What do you think is next for the automotive world in Malaysia? Particularly for Malaysians in the mid to low income groups where even the smallest increase in prices can lead to the biggest changes.
