Mercedes-Benz Caught in Triple Squeeze: Labor Revolt, China Slide, and Margin Crisis
29.06.2026 - 03:06:10 | boerse-global.de
Mercedes-Benz shares are clinging precariously to support, closing on Friday at €43.27 — just a whisker above the 52-week low of €43.01. The stock has now shed 29.81% since the start of the year, and a technical reading of 29.2 on the relative strength index signals deeply oversold conditions. Yet the real tension is playing out behind the factory gates, where management and workers are heading for a collision over pay and hours.
At the heart of the conflict is a push by the board to extract more from Germany’s 90,000-strong workforce without additional compensation. An internal memo obtained by news outlets demands a sharp productivity uplift, with plans to extend the standard working week from 35 to 40 hours — entirely without wage increases. The so-called “transformation bonus,” a special payment equivalent to 18.4% of a monthly salary originally scheduled for July 2026, is being pushed back to 2027. The works council has already vowed to resist the changes.
The cost-cutting drive reflects a brutal margin squeeze. Mercedes-Benz reported a first-quarter adjusted automotive margin of just 4.1%, the very bottom of its own target range, as revenue slipped to around €31.6 billion. China, once a cash cow, delivered a 27% year-on-year drop in vehicle sales amid a fierce price war and waning demand for luxury models. High production costs at home and the expensive shift to electric vehicles have only worsened the profit pressure.
Should investors sell immediately? Or is it worth buying Mercedes-Benz?
Analyst views are split on the stock’s next move. Bernstein Research maintains a “Market-Perform” rating with a €61 price target, though it flags lingering risks in supply chains and the slow EV ramp-up. Kepler Cheuvreux is far more cautious, slashing its target from €57 to €48 while keeping a “Hold” rating, citing gloomy margin and earnings prospects. The divergence underscores the uncertainty around how quickly the cost measures can arrest the decline.
Complicating matters further is a looming trade headwind. The European Commission is probing whether to impose additional tariffs on Chinese plug-in hybrids, a move that could invite retaliation from Beijing. High-margin export models such as the S-Class would be squarely in the crosshairs, adding a geopolitical layer to the company’s already strained outlook.
Investors now have two key dates on the calendar. On July 14, management will hold an analyst call to provide early colour on second-quarter trading. The main event arrives on July 28, when Mercedes-Benz publishes its full Q2 numbers. For the board, the numbers must prove that aggressive labour reforms and cost cuts can stop the margin slide. For the workforce, the fight over the 35-hour week is only just beginning.
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