Premium carmaker Mercedes-Benz Group AG's profit warning ahead of its third-quarter earnings announcement reflects a steep market-driven decline in sales volumes in China, an increasingly competitive Chinese premium market, and other earnings impediments such as tariffs and prolonged cost inflation linked to geopolitical instability. We expect these factors to limit our adjusted EBITDA margin below 10% and average free operating cash flow (FOCF) to sales below 3% in 2027 and to a lesser extent in 2028, albeit with limited prospects of reverting to the stronger metrics observed until 2024. We therefore lowered our long- and short-term issuer credit ratings on Mercedes-Benz Group AG and its rated subsidiaries to'A-/A-2'from'A/A-1'. At the same time, we lowered our senior unsecured
