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Yahoo
a day ago
- Automotive
- Yahoo
Mercedes-Benz Q2 revenues and EBIT slashed on tariffs impact
Mercedes-Benz has reported big drops to revenues and profits in the second quarter due to the impact of trade tariffs on its business. However, Mercedes-Benz Group also described a 'robust' financial performance in the second quarter (Q2) 2025 with strong cash flow, amid a dynamic business environment influenced by new tariff policies globally. Switch Auto Insurance and Save Today! Affordable Auto Insurance, Customized for You The Insurance Savings You Expect Great Rates and Award-Winning Service The company's three business units sustained a free cash flow of the industrial business reaching €1.9bn in Q2, a 14.5% increase from €1.6bn in the same period last year. However, the group's revenue and EBIT were affected by the new tariffs, with EBIT including €715m of adjustments, primarily for operational efficiency initiatives and mergers and acquisitions (M&A) transactions, such as the sale of production and sales capacities in Argentina. The group's revenue declined by 9.8% to €33.1bn ($38.6bn) from €36.74bn of Q2 2024, and its profit decreased by 68.7% to €957m compared to €3.06bn in the same period a year ago. The adjusted EBIT for Mercedes-Benz Group for Q2 2025 stood at €2.0bn, 50.9% down from €4.0bn in Q2 the previous year. This was said to be impacted by tariffs and the macro environment. Mercedes-Benz car sales were down by 9% in Q2 to 453,700 units impacted by market dynamics, particularly in China, and stock management in response to tariff influences. Mercedes-Benz Cars achieved an adjusted EBIT margin of 5.1% in Q2 and 6.2% for the H1. The company noted that without the latest tariffs, the return on sales (RoS) was 6.6% for Q2. Car sales were down by 9% in Q2 to 453,700 units, but this was a 2% increase from Q1 2025. The sales were impacted by market dynamics, particularly in China, and stock management in response to tariff influences. Top-end vehicles made up 14.3% of total sales, with plug-in hybrid vehicles (PHEV) sales growing by 34% in Q2 and xEV sales by 4%. The EBIT for cars in Q2 was affected by tariffs, 'softer' net pricing, efficiency measures, the macro environment, and lower unit sales. Meanwhile, Mercedes-Benz Vans posted an adjusted EBIT margin of 10.4% in Q2 and 11.0% for the H1, despite lower sales volumes leading to 93,400 units sold in Q2, a 10% decrease. However, sales of electric vans rose by 32% against the same quarter of the previous year. In Q2, vans featured the addition of 5,000 electric vans to the transportation network of Amazon. Previously, Mercedes-Benz Group reported a 9% decrease in sales for the Q2, selling 547,100 cars and vans. In the first half (H1) of 2025, Mercedes-Benz Group's revenue decreased by 8.6% to €66.37bn ($77.3bn), with EBIT at €3.56bn and adjusted EBIT at €4.53bn. Net profit for the H1 was decreased by 55.8% to €2.68bn from €6.08bn in the same period last year. For the H1 of the year, the free cash flow stood at €4.2bn, 9.3% up from €3.9bn reported in H1 2024. Net liquidity saw a significant rise to €30.8bn at the end of H1, compared to €27.4bn at the end of Q2 the previous year. For the H1, the adjusted RoS for Mercedes-Benz Cars was 6.2%, including the effects of tariffs (7.0% excluding tariffs). Looking ahead, Mercedes-Benz Group has updated its divisional guidance to account for tariff developments. The Group now anticipates a significant reduction in revenue compared to the previous year's level due to lower sales anticipated for its cars and vans. Sales at Mercedes-Benz cars are forecasted to be lower than 2024 levels, with H2 sales similar to the H1. The company has set a new full-year guidance range for return on sales adjusted at Mercedes-Benz Cars of 4% to 6%. For Vans, sales are anticipated to be 'significantly below' the last year, with a stronger H2 compared to the first. This includes tariffs, resulting in a new guidance range of 8% to 10% for return on sales adjusted at Mercedes-Benz Vans for the full year. Mercedes-Benz Group CEO Ola Kaellenius said: 'We're adapting to new geopolitical realities by using our global production footprint intelligently and by executing our Next Level Performance programme, which goes beyond efficiency measures, to increase the resilience of our company.' "Mercedes-Benz Q2 revenues and EBIT slashed on tariffs impact" was originally created and published by Just Auto, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
07-07-2025
- Automotive
- Bloomberg
Mercedes Car Sales Drop as Tariffs Crimp Demand in US, China
By Updated on Save Mercedes-Benz Group AG's vehicle sales declined in the second quarter after trade tensions led by President Donald Trump's tariffs hit demand in the US and China. Mercedes' global car sales fell 9% to 453,700 units from a year earlier, the German company said Monday. Sales dropped 12% in the US and 19% in China — two key markets where Mercedes models face import duties.
Yahoo
06-06-2025
- Automotive
- Yahoo
Automakers' Bonds Are a Hot Trade Now That Tariffs Are in Limbo
(Bloomberg) -- European carmakers are selling the most new bonds in years, seeking to take advantage of a calmer window in US President Donald Trump's trade war as well as strong investor demand for the high yields on offer. Next Stop: Rancho Cucamonga! ICE Moves to DNA-Test Families Targeted for Deportation with New Contract Where Public Transit Systems Are Bouncing Back Around the World US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn The Global Struggle to Build Safer Cars Automakers and parts manufacturers including Volkswagen AG and Mercedes-Benz Group AG sold more than €13 billion ($14.8 billion) of bonds in May, making it the busiest month for euro issuance in the sector since early 2017. Many more have launched deals in the first week of June, including a trio of junk-rated companies that supply components from car seats to steering wheels. The flood of sales comes after carmakers were effectively shut out of the market during the turmoil that followed Trump's so-called 'Liberation Day' announcements in early April. Since then, the president has retreated or scaled back various tariffs, including on auto parts, and markets have bounced back. At the same time, high demand for these sales — because of their hefty yields — are encouraging others to come to market. 'With the market feeling better and the buzz around tariffs somewhat abating, issuers are being opportunistic and tapping the market,' said Raphael Thuin, head of capital market strategies at Tikehau Capital. 'Financing is coming at a premium, but demand has been strong.' Deals from blue-chip carmakers have been well received, with BMW AG getting €6.5 billion in orders for a €2.5 billion offering. This week's junk-rated deals have also been popular. Volvo Car AB pulled in more than €1.9 billion orders for a €500 million sale, while French parts supplier Forvia SE — which saw its bonds tumble after Trump's April announcements — was able to increase the expected size of its offering. Investors are piling into the deals because tight bond spreads across the market haven't left much higher-yielding debt to invest in. The average yield on investment grade auto bonds sold in May was 3.49%, according to data compiled by Bloomberg compared with an average yield of 3.14% for an index of European high grade corporate bonds as of Thursday's close. Yields on junk-rated bonds are also proving tempting for investors. Troubled German parts firm ZF Friedrichshafen AG sold a five-year bond this week with a 7% yield, compared with 4.75% when it last sold euro debt in January 2024. The €1.25 billion sale pulled in more than €4.5 billion of orders. Demand has been helped by index-benchmarked investors, who may have cut their positions in the sector during April's turmoil and are now rebuilding them. 'This is a good opportunity to reduce underweights on credits, with deals pricing attractively,' said Chris Higham, portfolio manager at Aviva Investors. And there's plenty of cash to put to work. Money managers have been pouring money into European fixed income bond funds, with investment grade inflows hitting $3.14 billion and high-yield inflows reaching $1.02 billion in the week to May 28, according to EPFR data cited by Bank of America Corp. Still Cautious To be sure, carmakers are not out of the woods, with further tariff turmoil likely and levies on raw materials — like steel and aluminum — potentially making their costs more expensive. The current increase in borrowing costs may add to challenges in the future as well. Gordon Shannon, a portfolio manager at TwentyFour Asset Management said he has been 'startled with the way bond investors have embraced autos.' He cited the huge orders that investors put in for a Volkswagen AG hybrid bond — the riskiest type of debt that a corporate can sell — as an example of excessive enthusiasm. Tikehau's Thuin agrees. 'We view the sector as still facing long term structural headwinds which are nowhere near disappearing,' he said. 'Although the sector is trading cheap, we are still very cautious.' Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P. Sign in to access your portfolio
Bloomberg
13-05-2025
- Automotive
- Bloomberg
Mercedes to Move Output of its Best-Selling GLC SUV to US
Mercedes-Benz Group AG confirmed that it will move production of its GLC sport utility vehicle to the US, as President Donald Trump's tariffs raise costs and threaten to make imported cars less competitive. Output of the US-made GLC at Mercedes' Alabama factory is due to start at the end of 2027, the German automaker said late Monday. The company had announced the move earlier this month, without specifying the model.
