Find A Rating 
PRESS RELEASES
RAM Ratings affirms AAA(s) rating of Mercedes-Benz Services Malaysia
Published on 29 Jul 2025.
RAM Ratings has affirmed the AAA(s)/Stable rating of Mercedes-Benz Services Malaysia Sdn Bhd’s (MBSM or the Company) RM3 bil MTN Programme (2018/2038). Concurrently, RAM Ratings has withdrawn the AAA(s)/Stable/P1 rating of MBSM’s RM3 bil Commercial Papers/Medium-Term Notes (MTN) Programme (2018/2025) following confirmation from the facility agent that the programme has expired. Accordingly, our rating obligation of this programme has ended.
The issue rating is premised on the strength of an irrevocable and unconditional guarantee from Mercedes-Benz Group AG (the Group) – MBSM’s ultimate parent – which enhances the credit profile of the Company’s debt facility beyond its standalone credit strength.
Mercedes-Benz Group AG’s credit profile reflects its strong position as a leading global premium vehicle manufacturer, underpinned by a solid financial profile and strong brand equity. However, softening demand, reduced competitiveness in key markets and intensifying pricing pressures have recently posed challenges. In FY Dec 2024, the Group’s revenue was down 4% at EUR146 bil while pre-tax profit dropped to EUR14 bil (FY Dec 2023: EUR20 bil). We expect a weaker performance for fiscal 2025 but the Group’s robust balance sheet and operational flexibility are anticipated to provide a sufficient buffer against near-term macroeconomic challenges and potential US tariff-related headwinds. Excluding the financial services division, the Group maintained a robust net cash position of EUR10.0 bil in 1Q FY Dec 2025.
Mercedes-Benz Group AG’s Malaysian operations are represented by MBSM and Mercedes-Benz Malaysia Sdn Bhd (MBMy, the retailer and distributor of Mercedes-Benz vehicles and spare parts). MBSM is the captive financier for Mercedes-Benz vehicles in Malaysia, having financed 4.4 out of 10 new passenger cars in 2024. Its standalone credit profile is anchored by solid asset quality indicators which moderate rating weakness from a highly leveraged balance sheet and an inherent dependence on wholesale funding.
MBSM’s gross impaired financing (GIF) ratio improved to 0.8% as at end-December 2024 (end-2023: 1.0%) following large write-offs of pandemic-related impaired accounts. MBSM recorded a smaller net impairment allowance writeback of RM1.2 mil in FY Dec 2024 (FY Dec 2023: writeback of RM5.2 mil). GIF coverage stayed adequate at 93%.
Weighed down by higher operating expenses and a smaller provision writeback, MBSM’s pre-tax profit fell to RM23.9 mil (FY Dec 2023: RM31.1 mil). The Company’s net interest margin was also a narrower 2.79% (FY Dec 2023: 2.95%) owing to the higher cost of funds and stiff competition from banks. As a result, the pre-impairment return on assets declined to 1.0% from 1.1% a year earlier. Looking ahead, Mercedes-Benz’s softer local market share performance, amid heightened competition from promotional campaigns and new model launches by other brands, may pose some challenges to MBSM’s future business volumes and growth trajectory. While MBSM’s gearing stayed elevated at 11.4 times as at end-2024, all the Company’s borrowings (including debt facilities) are guaranteed by Mercedes-Benz Group AG, whose financial support will be forthcoming when needed.
Analytical contacts
Johan Faizul
(603) 2708 8235
johan@ram.com.my
Sophia Lee
(603) 2708 8211
sophia@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my
The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.
RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.
Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.
Published by RAM Rating Services Berhad
© Copyright 2025 by RAM Rating Services Berhad
