The German car giant’s net profit fell to €10.4 billion (US$10.8 billion), down 28% from 2023, while revenues also slid about 4% to €145.6 billion.

The group said it planned to slash production costs by a tenth by 2027 as it seeks to “ensure the company’s future competitiveness”.

“In an increasingly uncertain world, we are taking steps to make the company leaner, faster and stronger,” CEO Ola Kallenius said in a statement.

It was the latest bad news from one of the country’s car titans, which are reeling from a stuttering shift to electric vehicles (EVs), fierce competition in China from local rivals and weakening demand elsewhere.

In China, Mercedes’s biggest single market, sales dropped 7% in 2024.

German manufacturers all invested heavily in China in recent decades but are facing fierce competition from local rivals.

Overall the group’s sales fell 4% last year from the previous year, hit by a drop of 23% in sales of EVs.

It was the latest evidence that the transition to EVs is stalling, a slowdown that is weighing heavily on carmakers across Europe.