According to Reuters, brokerage firm Bernstein said in a report that German automaker Mercedes-Benz expects tariff-related headwinds to have a profit margin of less than 3% in the second quarter of this year. shouldforecastBased on the content of the company’s regular investor conference call before the release of its quarterly results.
Image credit: Mercedes-Benz
Bernstein said after a phone call with Mercedes-Benz’s head of investor relations that this is mainly due to “the easing of trade tensions between China and the United States, the pass-through of some tariff costs, and the time buffer effect of the gradual increase in tariffs that began in April.”
The investor conference call was not open to the media and was held during the information quiet period before Mercedes-Benz’s second-quarter earnings report (scheduled to be released on July 30).
In April, Mercedes-Benz withdrew its 2025 profit forecast due to uncertainty about the impact of US President Donald Trump’s tariff policy on imported cars. At the time, Mercedes-Benz’s chief financial officer only said that if the tariff policy on U.S. imported cars, which took effect in April, remains unchanged throughout the year, it will lead to a 300 basis point (3%) reduction in the company’s passenger car profit margin and a 100 basis point (1%) in the van profit margin.
Bernstein noted in the report that Mercedes-Benz is in the European marketCar salesThe performance is said to be strong, and its retail sales in the United States have continued to grow steadily. Mercedes-Benz has not commented on this.
Separately, on June 30, Mercedes-Benz’s head of production Joerg Burger said that despite China’s export restrictions on raw materials, the company’s production has not been affected by the interruption.
Joerg Burger pointed out that Mercedes-Benz is vigilant about supply chain risks, especially rare earth shortages, but supply chain risks have not had any real impact on the company so far, and the company expects to continue this trend. Joerg Burger emphasized that Mercedes-Benz has a clear picture of its supply chain risk exposure and is ready to activate contingency plans if necessary.
At the same time, Joerg Burger added that Mercedes-Benz is continuing to evaluate whether it needs to invest in the field of auto parts or engine production to support its local manufacturing business in the United States to improve supply chain stability and sustainability.
As a countermeasure to the imposition of tariffs on the United States, China has imposed export restrictions on seven rare earth elements and related magnets in April this year. But as China restarts its supply of rare earth magnets, the threat of large-scale shutdowns in the automotive supply chain is receding.
