By Christoph Steitz and Ilona Wissenbach
FRANKFURT (Reuters) -Mercedes-Benz on Tuesday vowed to steer clear of entering a discount race, saying it would defend high pricing levels for its luxury cars as model changeovers and supply chain bottlenecks caused quarterly profits to fall.
The German luxury carmaker reported a 30% drop in first-quarter earnings before interest and tax (EBIT) to 3.86 billion euros ($4.13 billion), compared with the 3.87 billion LSEG estimate.
At the group's Mercedes-Benz Cars division, the return on sales fell to 9.6% from 14.9% a year earlier, with vehicle sales down 8% at 462,978, the company said, citing model transitions in the top-end segment and supply chain-related costs.
"Sales levels in the first quarter are seen as the trough, with second-quarter volumes expected to be better," the company said, adding it was aiming to hold and defend pricing at current levels that it said remained at a high level.
Thanks to a strong conversion rate, the group's free cash flow from its industrial business grew 3.2% to 2.23 billion euros, it said.
Finance chief Harald Wilhelm said that the group remained "vigilant about the global macroeconomic and geopolitical outlook", confirming the group's 2024 outlook that sees stable sales and slightly lower EBIT in 2024 compared with last year.
($1 = 0.9342 euros)