Summary
- Q1 EBIT drops 41% to 2.3 billion euros
- In talks with Trump team to boost US manufacturing presence
- Q1 car and van sales down 10% in Europe, China; up 1% in US
BERLIN, (Reuters) – Mercedes-Benz on Wednesday pulled its earnings guidance for 2025 amid uncertainty over the impact of U.S. President Donald Trump’s tariffs on car imports, as the German automaker posted sharply lower first-quarter profit.
“Clearly Mercedes-Benz is a global player … we don’t fear competition in any direction,” CEO Ola Källenius told analysts. “But that’s not the environment we’re operating in.”
He said “constructive” talks with the Trump administration over boosting Mercedes’ U.S. manufacturing presence were ongoing, but declined to provide details.
Chief Financial Officer Harald Wilhelm told analysts that, given the uncertainty over tariffs, full-year guidance “cannot be provided today with a reliable degree of certainty.”
But he said that if tariffs remained in place all year, it would reduce profit margins by 300 basis points on cars and 100 basis points on vans.
Mercedes faces challenges in all its major markets, from Trump’s tariffs, to competition from fast-moving rivals in China and new CO2 emissions targets in the European Union.
It joins a growing number of automakers pulling their annual forecasts.
Stellantis also said on Wednesday it was suspending its guidance. On Tuesday, Volvo Cars withdrew its earnings forecast for the next two years, citing uncertainty over the tariffs.
Meanwhile, German rival Volkswagen on Wednesday posted a steep drop in first-quarter profit and said it expected its annual operating profit margin at the lower end of guidance.
Mercedes told analysts at the end of March it had been stockpiling inventory in the U.S. to mitigate the impact of tariffs.
The premium automaker’s car and van sales dropped 7% in the first quarter, led by 10% declines in both Europe and China, though sales were up 1% in the U.S. market.
The company’s sales fell 3% last year, led by a 7% drop in China.
Mercedes reported a first-quarter profit margin for its car business of 7.3%, down from 9% in the same period last year.
Group earnings before interest and taxes plunged 41% year on year to 2.3 billion euros ($2.62 billion) in the quarter.
As part of its bid to regain lost market share in China, Mercedes last week unveiled a new all-electric luxury limousine van series called “Vision V” at the Shanghai car show.
($1 = 0.8794 euros)
Reporting by Rachel More. Editing by Mrigank Dhaniwala and Mark Potter
Source: worldautoforum.com
