Mercedes-Benz sees 4-6% margin for car business, with $418 million tariff hit
How did your country report this? Share your view in the comments.
Diverging Reports Breakdown
Mercedes-Benz trims profit margin forecast due to $420 million US tariff impact
Mercedes-Benz (MBGn.DE) trimmed its annual car sales and profit margin forecasts on Wednesday, flagging a nearly $420 million impact from U.S. tariffs in 2025. The German luxury carmaker said it expects a profit margin of 4% to 6% for its car business this year and annual group revenue “significantly below” 2024 levels. Mercedes shares were down 1.5% in early Frankfurt trading. The company and other German carmakers face a decline in China due to intensifying local competition. It also produces cars in its US. plant of Tuscaloosa, Alabama, where it also has a factory in Alabama. It said in February it expected the profit margin for the car division to be 6-8% this year, after earnings fell 30% in 2024, with a 40% slump in the car business.
Summary
Companies Profit margin for 2025 trimmed due to US tariff impact
US-EU trade deal imposes 15% tariffs, averts larger trade war
Mercedes faces declining China sales amid local competition
July 30 (Reuters) – Mercedes-Benz (MBGn.DE) , opens new tab trimmed its annual car sales and profit margin forecasts on Wednesday, flagging a nearly $420 million impact from U.S. tariffs in 2025.
The German luxury carmaker said it expects a profit margin of 4% to 6% for its car business this year and annual group revenue “significantly below” 2024 levels, both for its cars and vans, factoring in the impact of tariffs.
Sign up here.
The company had said in February, prior to the U.S. tariff changes, that it expected the profit margin for its car division to be 6-8% this year, after earnings fell 30% in 2024, with a 40% slump in the car business. It withdrew that guidance in April.
Excluding tariffs, the unit’s margin outlook would have been at the lower end of the original guidance, it said on Wednesday.
Mercedes shares were down 1.5% in early Frankfurt trading.
The U.S. struck a framework trade agreement with the EU 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.
Mercedes halved 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) in 2025.
Chancellor Friedrich Merz welcomed the trade deal, which averted a trade conflict that would have hit Germany’s export-driven economy and its large auto sector hard.
BENEFICIARY OF TRADE DEAL
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, or operating profit, 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.
Sales and operating profit figures were “no surprise”, Jefferies said in a note, pointing to lower volume and price and sales in China.
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.
($1 = 0.8657 euros)
Reporting by Alessandro Parodi and Amir Orusov in Gdansk; Additional reporting by Ilona Wissenbach; Editing by Milla Nissi-Prussak, Christian Schmollinger and Bernadette Baum
Our Standards: The Thomson Reuters Trust Principles. , opens new tab
Share X
Link Purchase Licensing Rights