BUSINESS

China’s Mercedes-Benz Dealers Urge Global Headquarters to Act on Financial Strain

Published: Jan. 31, 2026 1:38 a.m. GMT+8

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The Mercedes-Benz Arena in Pudong, Shanghai, on Oct. 24, 2025. Photo: VCG

A Chinese auto dealers’ association has escalated its concerns to Mercedes-Benz Group AG’s global headquarters, urging the German carmaker to address growing financial challenges among its local distributors.

The Auto Dealers Chamber of Commerce, part of the China All-China Federation of Industry and Commerce, sent two letters to Mercedes-Benz’s global management team on Jan. 6 and 23. The letters called for “emergency action” to support dealers struggling with excessive inventory, severe price inversions — where cars are sold at a loss — and delays in receiving rebates. The chamber’s statement was released on Wednesday.

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Chinese Mercedes-Benz dealers report severe financial stress from excess inventory, price inversions, and delayed rebates; over 52% operated at a loss in H1 2025.
Mercedes-Benz's China car sales fell 19% in 2025 (552,000 units); German brands' market share dropped to 15.4% as domestic brands rose to 65.3%.
Mercedes-Benz pledged to address dealer concerns; Chinese regulators issued draft guidelines warning against persistent below-cost sales.

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Who’s Who

Mercedes-Benz Group AG: Mercedes-Benz Group AG, a German automaker, is facing financial challenges with its Chinese dealerships. The company is under pressure from dealer associations to address issues like excessive inventory, price inversions (selling cars at a loss), and delayed rebates. Mercedes-Benz has acknowledged these concerns, promising to listen to dealers and seek solutions. The company's sales in China declined significantly in 2025.

Mercedes-Benz China: Mercedes-Benz China is facing pressure from Chinese auto dealer associations due to financial challenges among its distributors. Dealers are struggling with excessive inventory, price inversions, and delayed rebates. Mercedes-Benz China has acknowledged these concerns and is working to find solutions. The company's passenger car sales in China fell by 19% in 2025 as it adapts to the shift towards electric and intelligent vehicles.

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What Happened When

2025：: Mercedes-Benz passenger car sales in China fell 19% year-on-year to about 552,000 units.

By 2025：: Market share of domestic Chinese auto brands rose to 65.3%, while German brands' share fell to 15.4% (down from 21% in 2022).

First half of 2025：: 52.6% of auto dealers in mainland China operated at a loss; nearly three-quarters sold cars for less than acquisition price according to industry surveys.

December 2025：: The Auto Dealers Chamber of Commerce appealed to Mercedes-Benz China regarding financial pressures on local distributors.

December 2025：: The China Automobile Dealers Association (CADA) wrote to Mercedes-Benz, highlighting financial distress and issues in the manufacturer-seller relationship.

December 2025：: The State Administration for Market Regulation released draft guidelines warning about legal risks associated with sustained selling below cost.

Jan. 6, 2026：: The Auto Dealers Chamber of Commerce sent a letter to Mercedes-Benz’s global management team, urging emergency action.

Jan. 23, 2026：: The Auto Dealers Chamber of Commerce sent a second letter to Mercedes-Benz’s global management team.

Jan. 23, 2026：: Both the global and China-based Mercedes-Benz teams replied to the Auto Dealers Chamber of Commerce, promising to listen and seek solutions.