By Andrey Sychev (Reuters) -German premium automaker Mercedes-Benz on Friday said third-quarter earnings in the core car division plunged by 64%, massively missing analysts' estimates, as Chinese consumers continued to cut back on luxury goods in a weakening economy. "The Q3 results do not meet our ambitions," CFO Harald Wilhelm said in a statement, adding that the group will step up cost cuts. The July-September earnings were hit by model revamp costs as well as a tough market, especially for new versions of the G-Class SUV, which will roll out in the next quarter, Mercedes added.
It sees annual car sales slightly below the previous year, and fourth-quarter sales in line with the third quarter. A rare bright spot in the results was the continued cash flow generation from the industrial business, which reached 2.39 billion euros ($2.
59 billion) in the quarter, up 2% year-on-year. Adjusted earnings before interest and taxes (EBIT) in the car unit dropped to 1.2 billion euros versus LSEG's mean estimate of a 3.
6% drop to 3.19 billion euros CHINA WOES Mercedes-Benz CEO Ola Kaellenius has warned that Chinese consumers are extremely cautious about making big purchases, as long-standing economic weakness and by a local real estate crisis have created considerable uncertainty for consumers. The luxury carmaker cut its full-year profit margin target twice during the third quarter, joining a growing number of European rivals blaming a weakening Chinese car market for falling profits a.