After a century of successes, Mercedes is under pressure like never before – and must redefine its identity.
Indeed, on June 28 and 29, 1926, the then Daimler-Benz AG was founded.
The registration of the trademark follows on August 21, 1926.
The star of Mercedes of Daimler-Motoren-Gesellschaft is framed by the laurel wreath of Benz & Cie., complemented by the wordmarks Mercedes and Benz.
Vehicles of Mercedes bear this trademark to this day.
It belongs to the most recognizable symbols of the global automotive industry.
However, a century later, the brand faces an unprecedented stress test.
The anniversary year coincides with a period of declining sales, lower profit margins, high tariffs, and intense competition in China.
There where Mercedes relied for years on the myth of German engineering and on the purchasing power of the middle and upper class, local manufacturers such as BYD, Xpeng, Huawei, or Xiaomi are attacking with faster development cycles, software-defined vehicles, and an aggressive pricing policy.
This is reflected also in the value of the brand.
In the internationally recognized ranking of Interbrand, Mercedes-Benz remains in 10th place.
But its value has decreased within two years from over 60 billion dollars to 50 billion (44 billion euros).
Toyota has overtaken it and is now in 6th place.
Mercedes must now prove that its brilliance does not fade in the era of electromobility and software.
In the public image, the brand from the beginning stands out for superior technology, reliability, and an intense culture of innovation.
This is reinforced by the aggressive presence of new models already from the year of foundation.
The strong presence of Mercedes in car exhibitions in Berlin or Geneva impresses the public.
The first joint Mercedes-Benz program includes world premieres of passenger models such as the Mercedes-Benz 8/38 PS (W 02) and 12/55 PS (W 03).
Accuracy and prestige
In the early brand promise are included performance, comfort, and a sense of luxury.
The S, SS, SSK, and SSKL series in the late 1920s and early 1930s shaped the image of a brand as a manufacturer of exceptionally fast and exclusive cars.
The "Silver Arrows" from 1934 become a myth.
Mercedes connects the star with speed, accuracy, and international prestige.
Racing successes contribute decisively to its rise.
Mercedes becomes a brand of heads of state.
Adolf Hitler moves around with the 770 models, the so-called "Großer Mercedes".
After World War II, recovery is achieved also through iconic models.
The 300 "Adenauer" symbolizes representation in the young Federal Republic of Germany.
The 300 SL "Gullwing" from 1954 becomes iconic: based on racing, with a spaceframe, direct gasoline injection, and the impressive upward-opening doors.
The "Ponton" bring modern bodies to mass production, the "Heckflosse" makes safety visible, and the Strich-Acht becomes at the end of the 1960s a symbol of reliability with millions of sales.
Search for a reliable identity
Other milestones reinforce the profile: the S-Class as a pioneer in safety and comfort, the G-Class as a durable model between military, professional, and luxury vehicle, the 190 series and later the A-Class as entry level, the M-Class as an entry into the era of SUVs and then the AMG versions, the Maybach and the EQ models as an effort to balance performance, luxury, and electromobility.
Each model symbols the search for an identity between luxury and sales volume.
Crises always existed in the history of the company.
In the 1930s the global economic crisis and later World War II heavily affected the industry.
After 1945, Daimler-Benz had to rebuild factories and supply chains, but also face its role in the Nazi era.
One of the greatest strategic turnarounds was the merger with the American Chrysler: in 1998 as a "global company" and "marriage made in heaven".
Chrysler and Daimler aimed at scale and synergies. In practice however, the union became an example of cultural differences and overestimated synergies.
In 2007 the departure took place with major losses.
The lesson: size alone does not guarantee brand strength.
With globalization, Mercedes-Benz establishes itself as a global brand connecting luxury, responsibility, and engineering excellence.
Since the 2000s, assistance systems, the design of Gorden Wagener, and digital experiences shape its image.
Today it combines its historical DNA with electromobility, software, and sustainability.
Different from previous crises
However, now the problems are serious.
Mercedes faces a significant drop in operating profits and low performance in the core sector of passenger cars.
In China sales in 2025 decreased by 20%, and 2026 remains a difficult year.
In 2025, the adjusted earnings before interest and taxes (adjusted EBIT) plunged to 4.8 billion euros, marking a shocking drop of nearly 45% compared to the 8.7 billion euros of the previous fiscal year.
At group level, the bleeding is equally terrifying, with total profits collapsing from 13.7 billion euros to 8.2 billion euros.
In the causes are included the price war, the rise of local electric companies, and impacts from tariffs and exchange rates.
Electromobility is a double-edged sword: it requires massive investments, while customers in markets like the USA hesitate and Chinese competitors lead in software, battery costs, and speed.
Thus, the star is under pressure different from previous crises, which originated mainly from economic cycles.
The core question is whether Mercedes-Benz remains a benchmark for premium mobility, when luxury is defined more and more by software, charging, updates, and driver assistance systems.
The response of the company is the greatest aggressive model launch in its history.
Over 40 new or refreshed models will be released between late 2025 and 2027.
Even AMG turns to electromobility. A new software architecture, greater local development in China, stricter cost reduction, and less complexity constitute the strategy.
Technologically, the brand is again at a high level, even in China.
The CEO Ola Källenius has set a goal for 2028 or 2029 to return to the limit of 2 million sales annually, a level that previously was considered a given.
The shocking plan
The turbulence hitting one of the main pillars of the German economy now seems to take on dimensions of an open crisis.
According to a publication of the financial newspaper Automobilwoche, Mercedes-Benz is proceeding with a surprise move, suspending for this year the payment of a planned allowance.
The measure concerns approximately 90,000 employees, who are expected to see a reduction in their incomes. The specific allowance, which constitutes part of the collective bargaining agreement and corresponds to approximately 18% of a monthly salary, was to be paid in July 2026. However, according to the internal briefing, the payment is deferred to the next year.
According to the publication, the decision was taken without prior consultation with the trade union bodies of the company, a fact which has caused reactions inside the enterprise.
At the same time, it is reported that management is examining broader changes in the working framework, in the context of an effort to reduce costs and strengthen competitiveness.
Among the scenarios that have been put under discussion is included also the increase of weekly working time in Germany from 35 to 40 hours, without a corresponding increase in earnings.
In such a case, the employees would offer significantly more hours of work annually without additional financial compensation, a fact which has caused intense discussions within the ranks of the employees.
These developments come in a period of increased pressures for the European automotive industry, which faces challenges such as the slowdown in demand for electric vehicles, intense competition from Chinese companies, and the impacts of trade restrictions in key markets.
In this context, the workers' council of the company reacted strongly to the scenarios of changes.
Ergun Lümali, president of the General Works Council of Mercedes-Benz Group AG, criticized the proposed plans, arguing that they do not constitute a sustainable solution for the future course of the company.
He stressed that the strengthening of competitiveness cannot be achieved through a burden on the employees or an increase in unpaid work, but requires investments in innovation, development of new products, and the preservation of a stably qualified human workforce.
The coming years will show if the historical brilliance of the brand can regain competitive strength.
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