Mercedes-Benz withdrew its outlook for the year over the U.S. auto tariffs, joining several automakers hit by the uncertainty tied to President Donald Trump’s trade moves.
The tariff volatility “is too high to reliably assess” business development this year, Mercedes said on April 30.
The company warned that operating earnings, cash flow and margins would be hit if the current trade hurdles persist.
Trump’s tariffs are threatening to upend supply chains and raise the cost of sending cars around the world.
Mercedes ships Europe-made vehicles to North America while also producing models in the U.S. that are sold locally and exported to markets including China.
The president signed directives on April 29 easing the impact of his auto duties, including by changing some levies on foreign parts and preventing multiple tariffs from stacking on top of each other. While the move is expected to ease the burden, major questions — including whether the U.S. will reach a trade deal with China — remain unanswered.
Kerrigan Advisors recently sat down with Ron Schwartz, co-owner of leading Toyota dealership in Dallas, Texas Cowboy Toyota, to discuss his perspective on the changing auto retail industry and how Texas’ premium blue sky valuations drove him and his partners’ decision to sell their dealership in 2024.
For now, Trump’s back-and-forth has sowed uncertainty across the industry. Stellantis, Volvo and General Motors also pulled their forecasts over the duties.
Porsche — one of the automakers most exposed because it does not have a factory in the U.S. — lowered its profit outlook and warned it’s unable to estimate any tariff impacts from June.
Mercedes could add a further model at its U.S. plant
Mercedes operates a plant in in Tuscaloosa, Alabama, that makes cars including its high-end electric EQS SUV. The company is considering shifting another model to the U.S. in response to the tariffs, its production chief said earlier this month.
The disruption to global trade comes as Mercedes undergoes a major strategic overhaul.
Under CEO Ola Kallenius, the company has been pushing deeper into the luxury segment, reallocating resources away from entry-level offerings and concentrating on top-end models such as Maybach limousines, AMG performance cars, and the G-Class SUV.
But that shift has come under strain, particularly in China, where economic uncertainty and rising local competition led by BYD are weighing on demand for premium imports.
Mercedes’ adjusted operating earnings declined in the first quarter after sales in Asia’s largest economy fell 10 percent. Still, the company reported an adjusted automaking margin of 7.3 percent for the period, beating analyst projections.
