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Mercedes-Benz warns that its profits will be “significantly” lower as President Donald Trump follows the threat of import tariffs, and that it will launch a new cost-cutting programme .
The Stuttgart-based company on Thursday predicted it would fall from 12.6% in 2024 to 8.1% in 2024, but in 2025 it would range from 6-8%.
“The outlook is based on the current regulatory framework and does not include additional tariffs in this guidance,” said Harald Wilhelm, chief financial officer of Mercedes-Benz.
He said that if tariffs on exports from the EU to the US rise from the current level of 2.5% to 10%, the impact on the company’s auto margin would be up to 1% points prior to mitigation. ”.
Trump warned Wednesday that he was considering a 25% tariff on imported cars. More than half of the 374,000 vehicles sold in the US last year were imported.
The company’s automotive segment’s profits fell 41%, while net profit fell 28% last year to 1.04 billion euros. Revenue fell 5% to 146 billion euros.
Like most European rivals, Mercedes-Benz struggles with a sluggish demand in the region and a fierce price war in China, where consumers have lost the appetite for luxury cars such as the Maybach limos. After focusing on selling more luxurious, high margin cars in recent years, the decline in China’s demand for high-end vehicles has been hit particularly hard by Mercedes-Benz.
Mercedes-Benz stocks fell another 3% on Thursday as they outlined plans to counter low car demand and increased competition in China, falling more than 11% over the past year. The profit forecast is forecast twice last year.
Chief Executive Ola Karenius on Thursday revealed plans to cut production costs by 10% by 2027 by 2027 after negotiations with IG Metal Union over German employment cuts. He said the measure, along with plans to launch 12 new models in the coming years, starting with a new electric CLA, will help revive sales and improve margins.
On Thursday, France’s Renault warned that it hit the margin in 2025 due to stricter EU emissions regulations that take effect this year.
The group was one of the few European car manufacturers that would not issue profit warnings in 2024, but in 2025, an operating profit margin of over 7% from 7.6% in 2024, will increase sales of electric vehicles. We expect it to decrease due to more incentives. Reducing gasoline vehicles to meet emissions targets.
Under regulations that apply to corporate vehicle sales in 2025, automakers face harsher fines for overall portfolio emissions as part of the EU’s efforts to phase out new combustion engines in 2035 I’m doing it.
“Making EVs the dominant technology in Europe is a journey that lasts for 20 years,” said Luca de Meo, CEO of Renault. “That’s why we want flexibility.”
