Portugal Colonial - Mercedes-Benz profit plunges on tariff, China woes

Net profit for the period was 957 million euros ($1.1 billion), far below the 1.5 billion analysts polled by financial data firm FactSet had expected.

Without tariffs the firm's car business would have achieved a profit margin of 6.6 percent compared to an actual 5.1 percent, Mercedes-Benz said.

That amounts to a cost of hundreds of millions of euros given overall sales of 24.2 billion euros at the cars division for the quarter.

Mercedes-Benz CEO Ola Kaellenius said the results were "robust" considering "the dynamic business environment".

"We're adapting to new geopolitical realities by using our global production footprint intelligently," he added.

Trump in April slapped an additional 25-percent levy on imported cars as part of an aggressive trade policy he says will help boost US manufacturing.

That hit European carmakers, with Jeep- and Citroen-owner Stellantis as well as auto giant Volkswagen all reporting slumping North American sales at recent results.

Mercedes-Benz's own sales by volume fell 12 percent in the United States over the period.

In China they tumbled 19 percent, underlining the challenge the company faces against local competitors such as BYD.

Mercedes-Benz put out new guidance for the year to take account of tariffs, forecasting groupwide revenue "significantly below" the 146 billion euros it took in last year.

Back in February it expected 2025 revenue to be "slightly below" the 2024 level.

Along with other carmakers, Mercedes-Benz then withdrew its guidance in April whilst it digested the impact of Trump's tariff blitz.

At its key cars division Mercedes-Benz said that it now forecasts a profit margin of between 4 and 6 percent, including the effects of tariffs.

Excluding tariffs it expects a profit margin of between 6 and 8 percent.

E.Borba--PC