DMLRY - Mercedes Benz sales hit hard by persistent supply chain issues

Mercedes Benz Group ( OTCPK:DMLRY ) is still grappling with the impact of supply chain problems and pandemic impacts, according to a Q2 sales update.

The update posted on Monday showed that the German automaker’s sales fell 16% during the second quarter, with deliveries down a whopping 25% in China. Sales in the overall Asia region fell 20%, with lockdowns across the region faulted for the slumping sales. Sales in North America fell by a much smaller 3% while European sales slipped 10%.

Along with lockdowns across key markets like China, a “shortage of semiconductor components constrained supplies” and curtailed the manufacturer’s ability to meet strong demand. The issue of supply chain problems has been a familiar issue among automakers, with GM recently reporting nearly 100K vehicles awaiting final tech components.

Shares of the Stuttgart-based automaker fell over 4% after reporting the sales declines.

Nonetheless, Mercedes ( OTCPK:DMLRY ) management remained confident in full-year guidance given still-robust demand.

“Customer demand remains high. This is an honor and obligation for us. We are making every effort to fulfill customer expectations, despite the current supply restrictions,” said Britta Seeger, Member of the Board of Management of Mercedes-Benz Group AG responsible for Mercedes-Benz Cars Marketing and Sales. ”The electric ramp up is gaining traction: Sales of our fully electric vehicles increased by more than 90% in Q2 and even 134% in the first half of 2022. It shows that we offer compelling electric vehicles that our customers desire.”

Still, electric vehicles sales are building from a relatively small base as compared to combustion engine sales for the automaker.

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