India Emerges as Key Growth Market for MAHLE in 2025, Even as Group Earnings Fall

MAHLE GmbH reported a mixed financial performance in 2025, with reported earnings declining year-on-year even as underlying balance sheet metrics improved. The Stuttgart-based auto component maker posted sales of €11.3 billion, down from €11.7 billion in 2024, while net profit edged lower to €20 million from €22 million.

The company’s EBIT fell sharply to €228 million from €423 million, with the EBIT margin declining to 2.0% from 3.6%. The drop was largely due to the absence of a one-time gain of €164 million from the sale of shares in the Behr-Hella Thermocontrol (BHTC) joint venture in the previous year. Additionally, restructuring expenses and other special items weighed on earnings.

However, the company’s adjusted EBIT rose to €442 million from €347 million, with the adjusted EBIT margin improving to 3.9% from 3.0%, reflecting gains from cost controls and operational efficiencies.

“MAHLE is on the way to profitable growth,” Chairman of the Group Management Board and CEO Arnd Franz said. “The work has paid off. The achievements are measurable.”

Macro Headwinds Weigh on Performance

Geopolitical uncertainties, rising energy costs, currency volatility, and weak or stagnating demand across several regions made 2025 another challenging year for MAHLE. Intense competition, particularly from Chinese suppliers, added to the pressure. 

“The environment remains volatile and unpredictable. We will continue to adapt with a focus on reliability and competitiveness,” Franz said, adding that the company is pushing ahead with its efficiency programme “Back on Track”.

In 2025, the company’s sales were affected by declining customer demand and the resulting weaker vehicle production in key markets like Europe and North America. The slowdown in the US truck segment and slower-than-expected electrification in Europe weighed on performance.

The largest impact on sales was caused by the depreciation of various trading currencies against the euro. In addition, changes in the consolidation following the sale of joint venture shares and product divisions further reduced sales.

Regionally, MAHLE saw declines in Europe and China, while North America, South America and East Asia recorded growth on a currency-adjusted basis.

India emerged as the fastest-growing market, with sales rising by over 20% after adjusting for currency effects, underlining the increasing importance of growth markets in the company’s portfolio.

Business segments show resilience

MAHLE’s Powertrain and Charging business recorded sales of €3.9 billion in 2025, growing 1.9% adjusted for exchange rate effects. The development was affected, among other things, by the sluggish ramp-up of electric mobility in Europe.

The Thermal and Fluid Systems business achieved sales of €6.1 billion and was able to maintain the previous year’s level adjusted for exchange rate effects and consolidation effects.

Meanwhile, the Lifecycle and Mobility segment, , which includes aftermarket and services, grew 1.7% to €1.2 billion, supported by steady replacement demand.

Order intake stable, EV momentum uneven

MAHLE secured new orders worth €1.9 billion in annual sales terms in 2025, maintaining a stable trajectory.

Demand remained strong for thermal management systems, high-power electronics, electric drive components, e-compressors and conventional engine products. However, electrification-related order wins fell short of expectations, particularly in Europe, due to slower EV adoption, intense competition and shifting policy signals in key markets and new political decisions in the US.

Balance sheet strengthens

MAHLE improved its financial position during the year, reducing net debt by €136 million to €1.03 billion and raising its equity ratio to 21.9% from 20.1%.

Liquidity remained strong, supported by the extension of a €1.2 billion syndicated loan facility until 2029, reflecting continued lender confidence.

“This is a strong signal of the banks’ trust in our strategic orientation and the solid financial position of the group. The credit line gives us financial flexibility and the security we need for planning”, said Markus Kapaun, Member of the MAHLE Management Board and CFO. “With our strategy MAHLE 2030+, we are on the right track and will pursue our approach consistently.”

Focus on electrification, thermal management

MAHLE continued to prioritise its MAHLE 2030+ strategy, centred on electrification, thermal management and maintaining strength in internal combustion engine technologies.

In 2025, the company invested €607 million in R&D, maintaining its innovation intensity, with around 70% of patents linked to electrification. Key innovations included a new range extender system, advanced thermal modules and EV cooling solutions.

MAHLE also started transferring its thermal management expertise to applications outside the automotive industry, in areas such as stationary energy storage, megawatt charging and data centre cooling. In the aftermarket, it expanded its portfolio of high-voltage electronics and EV diagnostic tools.
Restructuring, consolidation to continue

In 2025, the company continued to streamline operations, through plant closures in Europe and North America, portfolio optimisation and headcount reduction. Its workforce declined by about 5% to 64,242 employees.

Franz warned that consolidation pressure, particularly in Europe, is likely to persist, especially if the EU does not develop a more open attitude to CO2.

“The decisions in Brussels will determine the consolidation pressure,” he said, urging policymakers to support technological diversity and industrial competitiveness.

“MAHLE will consistently continue to adapt and fight for innovations, orders, and jobs in Europe - this requires enough business here,” he said. 

Growth through diversification

Mahle is increasingly focusing on diversification beyond the automotive sector, targeting applications in infrastructure, logistics, maritime, mining, rail and defence.

To accelerate this shift, the company has created a new “Industrial and Special Solutions” unit within group sales. This will enable more efficient use of existing capacities and support smaller, customised projects.

Current focus areas include high-power and megawatt charging, data centre cooling, power electronics, chip cooling and hydraulic systems, signalling Mahle’s push to build new growth engines beyond traditional automotive demand.