BERLIN: Mercedes-Benz will step up cost cuts after earnings halved in the third quarter hit by tepid demand and fierce competition in China, it said on Friday.

The luxury carmaker cut its full-year profit margin target twice during the third quarter, joining a growing number of European rivals blaming a weakening Chinese car market for falling profits and margins.

Union Investment, which according to LSEG is among the 30 top investors in Mercedes, called on the management to amend its strategy as it sees no market for 2 million luxury cars any longer.

“We are clearly in favour of adjusting the strategy and adapting it to the new market conditions and the new competition from China,” said portfolio manager Moritz Kronenberger.

Mercedes refuses to participate in the price war in China and prefers to stick to its “value over volume” strategy, hoping that a massive new model rollout will help to revive sales next year.