Mercedes-Benz Faces Major Recall Amid Weak China Market

Mercedes-Benz is undergoing a substantial recall of over 500,000 vehicles in China due to safety defects in the wheel speed sensor. This issue affects models from the A-Class, B-Class, CLA, and GLA produced between 2011 and 2019. The malfunctioning sensor can impair crucial safety systems like ESP and ABS, particularly in hot and humid conditions.

This recall is mandated by Beijing's Market Regulation Authority and will take effect from November 27. Apart from the recall, Mercedes-Benz has also lowered its earnings forecast for 2024, attributing the decline primarily to sluggish business performance in China.

The Chinese market's shift towards electric vehicles, coupled with economic challenges such as high inflation and rising interest rates, has further strained the automaker's operations. The company's stock has taken a hit, and experts suggest that direct investments in China might be necessary to regain market traction.