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Finance

Mercedes pulls earnings guidance amid Trump tariff uncertainty

Published by Global Banking and Finance Review

Posted on April 30, 2025

Featured image for article about Finance

By Rachel More and Nick Carey

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 a sharply lower first-quarter profit.

The premium automaker said that "current volatility" from tariffs and the possible impact "in particular on customer behaviour and demand, is too high to reliably assess the business development for the remainder of the year."

Assuming that tariffs remain in place, Mercedes said, its profits will be "negatively impacted."

Mercedes faces challenges in all its major markets, from Trump's U.S. auto tariffs, to fierce competition from fast-moving rivals in China and tough new CO2 emissions targets in the European Union.

On Tuesday, Volvo Cars withdrew its earnings forecast for the next two years, citing uncertainty over the impact of Trump's tariffs.

Mercedes told analysts at the end of March it had been stockpiling inventory in the U.S. market to mitigate the impact of tariffs.

The German premium automaker saw car and van sales drop 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.

The German luxury carmaker reported a first-quarter profit margin for its car segment of 7.3%, down from 9% in the same period last year.

Group earnings before interest and taxes (EBIT) plunged 41% year on year to 2.3 billion euros ($2.62 billion) in the first three months of 2025.

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.

The vans will have lounge chairs that can fold down into a bed and huge screens that can turn the interior into a private cinema or karaoke bar.

($1 = 0.8794 euros)

(Reporting by Rachel More, editing by Kirsti Knolle and Mrigank Dhaniwala)