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Mercedes-Benz and Stellantis on Wednesday became the latest carmakers to pull their guidance due to trade uncertainty, despite US President Donald Trump a day earlier offering some relief to mitigate the costs of his tariff policy.
In a speech in Michigan on Tuesday, Trump offered small rebates to carmakers that manufacture their vehicles in the US to offset the costs of his broader levies, as well as an exemption from the administration’s tariffs on steel and aluminium for imported parts.
With the frequent changes in tariff policy companies have struggled to keep pace, while profits have fallen sharply during the first quarter even before the full force of the 25 per cent levies on imports of all foreign-made cars have taken effect.
Ola Källenius, chief executive at Mercedes-Benz, said on Wednesday that “you can calculate the crude effect of what the tariffs mean mathematically” but their impact on customers, suppliers and rivals would play out in an “asymmetric way”.
Its chief financial officer Harald Wilhelm added that if the tariffs remained in place for the full year, they would reduce the company’s profit margin in its car division by three percentage points.
The largest hit to margins would come from tariffs on car parts imported to the US from Mexico, while imports of models from Europe to the US as well as shipments from the US to China would also contribute to the impact.
Mercedes, which is betting that the latest model of its compact luxury cars launched this year will revive consumer enthusiasm, said first-quarter earnings before interest and taxes slumped 41 per cent to €2.3bn.
That was below the average analyst estimate for a profit of €2.6bn, according to S&P Capital IQ. Shares in Mercedes were down nearly 2 per cent on Wednesday morning.
German rival Volkswagen said earnings before taxes slumped 40 per cent to €3.1bn in the first quarter. It maintained its full-year outlook but cautioned that its group operating margin would fall to the lower end of its range at 5.5 per cent due to increasing trade restrictions.
Meanwhile, Stellantis, owner of the Peugeot, Fiat and Jeep brands, said its quarterly revenue fell 14 per cent to €35.8bn as shipments fell due to lower production of vehicles in the US.
On Tuesday, General Motors and Volvo Cars also pulled their guidance while Porsche warned that its profits this year would drop to a “historically low level” due to the fallout from the trade war.
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