Mercedes-Benz profits plunge as China sales slump and US tariffs spark major warning
On Wednesday, April 30, luxury carmaker Mercedes-Benz said its profits dropped sharply in the first few months of the year, mainly because of falling demand in China and concerns about tariffs in the United States.
The company’s net profit fell by nearly 43%, down to 1.73 billion euros (about $1.93 billion). That’s a big drop, and it shows how much pressure the carmaker is under in today’s changing global market.
Mercedes’ finance chief, Harald Wilhelm, tried to stay positive. He said the company’s focus on high-end, luxury cars and a strong financial position would help it through these tough times.
“This, combined with a healthy balance sheet provides a solid foundation to navigate our company through a period of geopolitical uncertainties,” Wilhelm said.
Still, it’s clear the company is struggling. Its earnings before interest and tax fell to 2.29 billion euros, which was about 15% lower than experts had predicted. Overall sales dropped by 7.4%, but it was much worse in China, where sales plunged nearly 25%. In the United States, which is one of Mercedes’ biggest markets, sales were also down 4.4%.
In China, Mercedes faces tough competition from local companies like BYD, which build electric vehicles that are more affordable and better suited to what local drivers want.
Making things worse, the company says it can’t predict how the rest of the year will go. That’s because of uncertainty over US tariffs, especially those imposed or threatened by President Donald Trump, including a 25% tariff on car imports.
Mercedes warned that if those tariffs stay in place for the rest of the year, they expect “material impacts” on their business.
