Net profit for 2025 was 5.3 billion euros ($6.3 billion), Mercedes said, down almost 49 percent on the 2024 figure, but better than had been expected in a poll of analysts by financial data firm FactSet.

"Amid a dynamic market environment, our financial results remained within our guidance," Mercedes-Benz CEO Ola Kaellenius said, adding that he saw hope in over 40 new model launches planned over the next three years.

"We are moving forward with a clear game plan and a very competitive product portfolio," he said.

The firm expects a similarly difficult 2026, with revenue projected to be around last year's level of 132.2 billion euros but core profit "significantly above" the 2025 figure thanks to one-off restructuring charges falling away.

But at its core car business, Mercedes sees a profit margin this year of between three and five percent -- weaker than the 5 percent it achieved this year.

A storied company that traces its history back to Carl Benz inventing the first motor car in 1885, Mercedes-Benz was facing a triple whammy of cratering sales in China, stagnant demand in Europe and the costs of investing into electric cars despite patchy demand even before US President Donald Trump last year hit foreign carmakers with tariffs.

China, the world's largest car market, has become a battleground for German carmakers amid a brutal price war and fierce competition from local players like BYD and Geely.

Mercedes-Benz's sales by volume in China plunged 19 percent last year to their lowest level since 2016, helping drag overall worldwide sales down by 10 percent.