FRANKFURT: German carmaker Mercedes-Benz reported a jump in profits for 2022 on Friday thanks to strong demand for high-end and electric models, but warned of a sluggish start to the new year in Europe.

Net profit jumped by 34 percent to 14.8 billion euros ($15.7 billion) last year, the Stuttgart-based group said, while revenues were up 12 percent year-on-year to 150 billion euros.

The earnings boost was down to a “sharpened focus” on premium cars and vans, which tend to have higher profit margins, combined with “tight cost control”, Mercedes-Benz said in a statement.

The group sold more than two million cars in 2022, a five-percent increase on the year before, driven by strong demand for the S-Class model and the all-electric EQS.

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Looking ahead, Mercedes warned that the global economy faced “an exceptional degree of uncertainty”, citing the war in Ukraine, the fallout from Covid restrictions in key market China and higher interest rates among the challenges ahead.

“In Europe, incoming orders are more sluggish,” it warned.

In China, “the fourth-quarter Covid-19 effect has led to a spill over impact on sentiment in the first quarter” of 2023, while demand in the United States was on “a good level”.

The group expects revenues to remain stable in 2023, while pre-tax profits will likely be “slightly below” the previous year’s level.