BERLIN/FRANKFURT: Mercedes-Benz posted stronger-than-expected profit margins in its core car division on October 29, lifted by increasing sales of high-end models that helped counter the impact of restructuring costs and job cuts.

The German automaker's return on sales at its car unit reached 4.8 percent in the third quarter, edging up from 4.7 percent a year earlier and beating analysts' forecasts of 3.9 percent, according to a Visible Alpha poll.

Sales of top-end vehicles, including the Maybach and AMG brands, rose 10 percent, bolstering profitability and generating free cash flow of 1.4 billion euros (US$1.6 billion). The results prompted Mercedes to resume its share buyback program.

"The animal that is able to adapt is the one that survives and thrives in evolution," said Chief Executive Ola Kaellenius. "The hyper-competition in China is not going away any time soon. This is certainly a multi-year task."

The company's operating profit fell 70 percent, largely due to charges from its ongoing global restructuring plan. The plan aims to save 5 billion euros by 2027 through workforce reductions and efficiency measures.

One Frankfurt-based trader said the performance "should be good enough for a positive market reaction," as investors focused on the strong margins despite cost pressures. Mercedes shares rose six percent, leading gains on Germany's blue-chip DAX index.

Meanwhile in India, Mercedes-Benz reported record-breaking sales during the nine-day Navratri festival in September, delivering more than 2,657 cars in that period, a year-on-year increase of over 66 percent.

Mercedes-Benz India attributed this surge to improved consumer sentiment following recent GST rate reductions. The company also recorded its best-ever September and strongest second-quarter performance, with total sales reaching 5,119 units.

Mercedes joins rivals Porsche and BMW in grappling with challenges across key markets. In China, price wars among local luxury and electric vehicle makers continue to squeeze margins, while U.S. import tariffs add to pressure on exports. In Europe, tightening emissions standards are accelerating the shift to electric vehicles, often at the expense of profitability.

Kaellenius said Mercedes would continue to prioritize premium models and a disciplined pricing approach to safeguard returns amid volatile global conditions.