Mercedes Posts Sharp Decline in Full-Year Earnings
The luxury carmaker's full-year operating profit plummeted to €5.8 billion ($6.9 billion)—a 57% freefall from the prior year—undershooting analyst forecasts and signaling deepening industry turmoil.
Mercedes-Benz Group attributed the financial downturn to approximately €1 billion ($1.2 billion) in tariff-related costs, while citing weakened competitive positioning in China and adverse foreign exchange movements as compounding factors.
"Amid a dynamic market environment, our financial results remained within our guidance, thanks to our sharp focus on efficiency, speed, and flexibility," Ola Kallenius, chairman of the board of management at Mercedes-Benz Group, said in a statement.
The Stuttgart-based manufacturer projected adjusted return on sales for Mercedes-Benz cars between 3% and 5% for 2026—down from 5% in 2025—while announcing aggressive cost-cutting initiatives and multiple new vehicle launches throughout the coming year.
The Munich-listed company's shares plunged 4.3% during morning trading Thursday. The stock has shed approximately 10% year-to-date.
Mercedes-Benz Group posted 2025 revenue of $157 billion, forecasting comparable revenue levels for 2026. Group earnings before interest and taxes are expected "significantly above" the previous year's benchmark.
The results underscore broader struggles confronting European automakers, including escalating production expenses, supply chain volatility, stringent regulatory requirements, and turbulent electric vehicle transition efforts.
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