Mercedes-Benz forecasts car business profit margin at 4% to 6% for 2025
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Mercedes-Benz sees 4-6% margin for car business, with $418 million tariff hit
Mercedes-Benz expects a profit margin of 4% to 6% for its car business this year, including a nearly $420 million impact from tariffs. U.S. struck a framework trade agreement with the European Union on Sunday, imposing a 15% import tariff on most EU goods. German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that would have hit Germany’s export-driven economy and its large auto sector hard. Mercedes is among the most significant beneficiaries of the U.-EU trade deal due to its greater share of imports into the U.s. from Europe than from Mexico or Canada, Morningstar analysts wrote in a research note on Monday. The company and other German carmakers face a decline in China due to intensifying local competition, their higher price tags and strategic missteps in the transition to electric vehicles. The German luxury carmaker had said in February it expected the profit margin to be just 6-8% this year.
Summary
Companies Mercedez-Benz expects car business margin of 4-6% this year
Estimates 362 million euro tariff hit on the unit’s adj. EBIT
Sees group revenue ‘significantly below’ 2024 levels
Group Q2 adj. EBIT halved to 1.99 billion euros
July 30 (Reuters) – Mercedes-Benz (MBGn.DE) , opens new tab expects a profit margin of 4% to 6% for its car business this year, including a nearly $420 million impact from tariffs, it said on Wednesday in a first assessment of the damage from U.S. President Donald Trump’s trade war.
The German luxury carmaker had said in February it expected the profit margin for its car division to be just 6-8% this year, after its earnings fell 30% in 2024, with a 40% slump in the car business. It pulled that guidance, which did not include the tariff effects, in April.
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The U.S. struck a framework trade agreement with the European Union on Sunday, imposing a 15% import tariff on most EU goods – half the threatened rate – and averting a bigger trade war between the two allies that account for almost a third of global trade.
U.S. officials said the EU had agreed to lower non-tariff barriers for automobiles and other products.
Mercedes cut in half its expectations for the impact of tariffs on its car business margin to about 150 basis points, a company spokesperson said. That would result in a tariff effect of 362 million euros ($418 million) on the division’s adjusted operating profit (EBIT).
Excluding tariffs, the unit’s margin would be in the lower end of the original guidance, it said.
German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that would have hit Germany’s export-driven economy and its large auto sector hard.
U.S. President Donald Trump had threatened to impose a 30% tariff on imports from the 27-nation EU bloc from August 1 in the absence of an agreement.
Mercedes is among the most significant beneficiaries of the U.S.-EU trade deal due to its greater share of imports into the U.S. from Europe than from Mexico or Canada, Morningstar analysts wrote in a research note on Monday.
It also produces cars in its U.S. plant of Tuscaloosa, Alabama.
Map with markers that look like cars showing where Mercedes cars are assembled.
The company’s second-quarter adjusted operating income more than halved to 1.99 billion euros ($2.30 billion).
The impact of tariffs, efficiency measures and a 750 million euro impact from the sale of a plant and restructuring in Argentina lowered its reported EBIT even further to 1.27 billion euros, it said in a statement.
Its revenues dropped 9% to 33.15 billion euros on lower car and van sales, as well as the impact of tariffs.
Mercedes said it expected annual group revenue to be “significantly below” 2024 levels, both in its cars and vans businesses.
Unit sales in China decreased by 10% and 19% respectively in the first and second quarters of 2025 compared to last year, it had said earlier this month.
The symbol map shows a breakdown of Mercedes’ 2024 car sales by region.
The company and other German carmakers face a decline in China due to intensifying local competition, their higher price tags and strategic missteps in the transition to electric vehicles.
($1 = 0.8657 euros)
(This story has been corrected to say million, not billion, in the headline)
Reporting by Alessandro Parodi and Amir Orusov in Gdansk; Additional reporting by Ilona Wissenbach; Editing by Milla Nissi-Prussak and Christian Schmollinger
Our Standards: The Thomson Reuters Trust Principles. , opens new tab
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Mercedes-Benz sees 4-6% margin for car business, with $418 million tariff hit
Mercedes-Benz expects a profit margin of 4% to 6% for its car business this year, including a nearly $420 million impact from tariffs. U.S. struck a framework trade agreement with the European Union on Sunday, imposing a 15% import tariff on most EU goods. German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that would have hit Germany’s export-driven economy and its large auto sector hard. Mercedes is among the most significant beneficiaries of the U.-EU trade deal due to its greater share of imports into the U.s. from Europe than from Mexico or Canada, Morningstar analysts wrote in a research note on Monday. The company and other German carmakers face a decline in China due to intensifying local competition, their higher price tags and strategic missteps in the transition to electric vehicles. The German luxury carmaker had said in February it expected the profit margin to be just 6-8% this year.
Summary
Companies Mercedez-Benz expects car business margin of 4-6% this year
Estimates 362 million euro tariff hit on the unit’s adj. EBIT
Sees group revenue ‘significantly below’ 2024 levels
Group Q2 adj. EBIT halved to 1.99 billion euros
July 30 (Reuters) – Mercedes-Benz (MBGn.DE) , opens new tab expects a profit margin of 4% to 6% for its car business this year, including a nearly $420 million impact from tariffs, it said on Wednesday in a first assessment of the damage from U.S. President Donald Trump’s trade war.
The German luxury carmaker had said in February it expected the profit margin for its car division to be just 6-8% this year, after its earnings fell 30% in 2024, with a 40% slump in the car business. It pulled that guidance, which did not include the tariff effects, in April.
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The U.S. struck a framework trade agreement with the European Union on Sunday, imposing a 15% import tariff on most EU goods – half the threatened rate – and averting a bigger trade war between the two allies that account for almost a third of global trade.
U.S. officials said the EU had agreed to lower non-tariff barriers for automobiles and other products.
Mercedes cut in half its expectations for the impact of tariffs on its car business margin to about 150 basis points, a company spokesperson said. That would result in a tariff effect of 362 million euros ($418 million) on the division’s adjusted operating profit (EBIT).
Excluding tariffs, the unit’s margin would be in the lower end of the original guidance, it said.
German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that would have hit Germany’s export-driven economy and its large auto sector hard.
U.S. President Donald Trump had threatened to impose a 30% tariff on imports from the 27-nation EU bloc from August 1 in the absence of an agreement.
Mercedes is among the most significant beneficiaries of the U.S.-EU trade deal due to its greater share of imports into the U.S. from Europe than from Mexico or Canada, Morningstar analysts wrote in a research note on Monday.
It also produces cars in its U.S. plant of Tuscaloosa, Alabama.
Map with markers that look like cars showing where Mercedes cars are assembled.
The company’s second-quarter adjusted operating income more than halved to 1.99 billion euros ($2.30 billion).
The impact of tariffs, efficiency measures and a 750 million euro impact from the sale of a plant and restructuring in Argentina lowered its reported EBIT even further to 1.27 billion euros, it said in a statement.
Its revenues dropped 9% to 33.15 billion euros on lower car and van sales, as well as the impact of tariffs.
Mercedes said it expected annual group revenue to be “significantly below” 2024 levels, both in its cars and vans businesses.
Unit sales in China decreased by 10% and 19% respectively in the first and second quarters of 2025 compared to last year, it had said earlier this month.
The symbol map shows a breakdown of Mercedes’ 2024 car sales by region.
The company and other German carmakers face a decline in China due to intensifying local competition, their higher price tags and strategic missteps in the transition to electric vehicles.
($1 = 0.8657 euros)
(This story has been corrected to say million, not billion, in the headline)
Reporting by Alessandro Parodi and Amir Orusov in Gdansk; Additional reporting by Ilona Wissenbach; Editing by Milla Nissi-Prussak and Christian Schmollinger
Our Standards: The Thomson Reuters Trust Principles. , opens new tab
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