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Mercedes-Benz Reports Steep Earnings Drop
(MENAFN) German premium car manufacturer Mercedes-Benz Group revealed on Thursday a significant fall in annual profits and cautioned about challenging times ahead, following a year marked by intense competition from Chinese rivals and substantial global tariff costs.
For 2025, the automaker posted a full-year operating profit of €5.8 billion ($6.9 billion), reflecting a 57% decline compared with the previous year and falling short of analysts’ expectations.
The company noted that tariff-related expenses totaling €1 billion ($1.2 billion), along with competitive pressures in China and adverse currency fluctuations, negatively impacted its earnings performance.
“Amid a dynamic market environment, our financial results remained within our guidance, thanks to our sharp focus on efficiency, speed, and flexibility,” stated Ola Kallenius, chairman of the board of management at Mercedes-Benz Group.
Looking ahead, the Mercedes-Benz Group aims for an adjusted return on sales for its Mercedes-Benz cars of 3% to 5%, anticipating further cost savings and a series of new product launches in 2026. This target is lower than the 5% adjusted return on sales recorded in 2025.
Shares of the Munich-listed company fell 4.3% during morning trading, with the stock down roughly 10% year-to-date.
For 2025, the automaker posted a full-year operating profit of €5.8 billion ($6.9 billion), reflecting a 57% decline compared with the previous year and falling short of analysts’ expectations.
The company noted that tariff-related expenses totaling €1 billion ($1.2 billion), along with competitive pressures in China and adverse currency fluctuations, negatively impacted its earnings performance.
“Amid a dynamic market environment, our financial results remained within our guidance, thanks to our sharp focus on efficiency, speed, and flexibility,” stated Ola Kallenius, chairman of the board of management at Mercedes-Benz Group.
Looking ahead, the Mercedes-Benz Group aims for an adjusted return on sales for its Mercedes-Benz cars of 3% to 5%, anticipating further cost savings and a series of new product launches in 2026. This target is lower than the 5% adjusted return on sales recorded in 2025.
Shares of the Munich-listed company fell 4.3% during morning trading, with the stock down roughly 10% year-to-date.
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