Net profit in the first three months of the year dropped 24.6% compared with the same period in 2023, down to €3 billion (US$3.2 billion) from €4 billion.

The figure was better than a prediction by analysts surveyed by financial data firm FactSet, who had forecast a figure of €2.8 billion.

Revenues in the first quarter fell by 4.4% to €35.9 billion as a result of the sales hit.

Mercedes said in a statement its performance had been boosted by “lower raw material prices, tight cost control” and a strong performance in its vans division.

Revenues in the utility vehicles segment were up 6% in the first quarter to €4.9 billion.

The increase propelled a 22.4% rise in the division’s operating profit to €933 million — a closely watched measure of underlying performance.

The strength of the van business however failed to offset a difficult quarter for the group’s core car unit.

A first-quarter drop of 7.5% in revenues, which fell to €25.7 billion, was down to “supplier bottlenecks and model changeovers in the top-end segment”, the group said.

Unit sales of cars were down 8% to just under 463,000, Mercedes said. The drop was matched in battery vehicles with some 47,500 units sold.

The result reflected “solid results in all regions except Asia”, Mercedes said.

Looking ahead, Mercedes kept its outlook unchanged, saying it expected supply issues to ease over the course of the year.

“Sales levels in the first quarter are seen as the trough, with second quarter volumes expected to be better,” the group said.

Overall Mercedes said it expected sales in 2024 to match those in the previous year.