Mercedes-Benz faces profit drop amid China market slump and trade tariffs
German premium carmaker Mercedes-Benz reported a sharp decline in third-quarter profit on Wednesday, weighed down by weak sales in China and U.S. tariffs.
The Stuttgart-based company’s net profit fell 30.8% to 1.19 billion euros ($1.38 billion), surpassing analyst expectations of 1.09 billion euros, according to a FactSet poll, News.Az reports, citing foreign media.
“Our third-quarter results are in line with our full-year guidance,” Mercedes-Benz CEO Ola Kaellenius said.
In July, the company lowered its annual outlook following U.S. President Donald Trump’s tariff measures, predicting 2025 revenue “significantly below” last year’s 146 billion euros. Car exports from the EU face a 15% tariff under a recent EU-U.S. deal—down from 27.5% but still higher than the pre-trade war rate of 2.5%.
Mercedes-Benz, which operates a plant in Tuscaloosa, Alabama, also faces 25% U.S. duties on imported car parts from outside North America.
Sales in China, the world’s largest car market, fell 27% in the third quarter, dragging overall volumes down 12%. The market has become fiercely competitive, with German brands contending against local players like BYD amid a brutal price war.
Kaellenius said Mercedes is collaborating with Chinese self-driving software firm Momenta to make its vehicles competitive, though a turnaround will be a “multi-year task.”
“Looking ahead, we expect the market environment to remain challenging,” he added. “Hyper competition in China is not going away anytime soon.”
Despite the profit slump, Mercedes shares rose 6% at the start of trading in Frankfurt, where broader market indices remained flat.
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