Mercedes AG’s ratings are confirmed by Fitch at “A-,” with a positive outlook.

Mercedes Benz’s (MB) luxury focus and pricing power will be tested by potential energy disruptions and weakening consumer demand within the next 12-18 months; however, Fitch forecasts profitability to remain above its positive rating sensitivities. Fitch believes an established track record of strong pricing control that supports stable EBIT margins above 10% will drive a rating upgrade. Mercedes is aiming to increase the sales of its top end luxury vehicles by 60% of its car sales by 2026, which represents 30% of car sales as of today. Successful execution of this strategy would further support its pricing power and reduce recessionary pressures. Any upgrade to the rating will be driven by the extent of these strengths in the medium term and the sustainability of strong double-digit profitability.