German automaker Mercedes-Benz and Jeep-maker Stellantis suspended their earnings guidance for 2025 on Wednesday amid growing uncertainty caused by tariffs imposed by U.S. President Donald Trump, which appear to be increasingly weighing on businesses, from automakers to online retailers.
Mercedes-Benz pulled its earnings guidance for 2025 amid the unpredictability of the impact of Trump's tariffs on car imports, as the German automaker posted a sharply lower first-quarter profit.
"Mercedes-Benz is a global player ... we don't fear competition in any direction," CEO Ola Kallenius told analysts. "But that's not the environment we're operating in."
He said "constructive" talks with the Trump administration over boosting Mercedes' U.S. manufacturing presence were ongoing but declined to provide details.
CFO Harald Wilhelm told analysts that, given the uncertainty over tariffs, full-year guidance "cannot be provided today with a reliable degree of certainty."
But he said that if tariffs remained in place all year, it would reduce profit margins by 300 basis points for cars and 100 basis points on vans.
Mercedes faces challenges in all its major markets, from Trump's tariffs to competition from fast-moving rivals in China and new CO2 emissions targets in the European Union.
It joins a growing number of automakers pulling their annual forecasts.
Stellantis also said on Wednesday it was suspending its guidance. On Tuesday, Volvo Cars withdrew its earnings forecast for the next two years, citing uncertainty over the tariffs.
Stellantis, the parent company of Jeep, Peugeot and Fiat, whose brands also include Ram trucks, Opel and Dodge, said that despite a 14% drop in first-quarter revenue to 35.8 billion euros ($40.7 billion), it saw signs of a commercial turnaround.
Nevertheless, the group stated that it was "suspending its 2025 financial guidance due to evolving tariff policies, as well as the difficulty in predicting possible impacts on market volumes and the competitive landscape."
Much of the drop in revenues was due to a reduction in shipments, which fell 9% to 1.22 million vehicles, partly due to lower production volumes in North America, where factories were given extended holiday downtime.
Stellantis suffered a stinging 12% drop in the number of vehicles it sold last year, with its key North American market plunging by a quarter, as it struggled to sell a bulge in inventory in the United States.
Shipments declined by 20% in North America during the first quarter, resulting in a 25% decrease in revenues.
However, CFO Doug Ostermann said the company sees signs of a turnaround.
"While first quarter 2025 top-line results were below prior-year levels, other key performance indicators reflect early, initial progress on our commercial recovery efforts," he said in a statement.
This included a surge in orders in North America before tariffs took effect, as well as improvements in Europe.
The company stated that it is "highly engaged with policymakers on tariff policies, while taking action to mitigate the impacts."
Meanwhile, German rival Volkswagen on Wednesday posted a steep drop in first-quarter profit and said it expected its annual operating profit margin to be at the lower end of guidance.
Net profit of VW fell 40.6% in the first three months of the year to hit 2.19 billion euros, even as revenue rose 3% to reach 77.56 billion euros.
Trump has threatened and imposed a variety of tariffs designed to bring manufacturing back to his home country, including a 25% levy on car imports.
North America took just over 11% of Volkswagen vehicle deliveries in the first quarter, making it the firm's third most important region after Western Europe and China.
Speaking on a call for analysts and investors, Volkswagen's finance chief, Arno Antlitz, said it was "too early to say" if Volkswagen would step up manufacturing in the U.S. to circumvent any tariffs.
It already has a plant in Tennessee, but most of the vehicles it sells in the U.S. are imported.
Volkswagen expects a profit margin of between 5.5% and 6.5% for the coming year, but its guidance does not take into account the variable American tariffs.
"It's highly difficult to give a projection for the full year," Antlitz said.
Mercedes, on the other hand, told analysts at the end of March it had been stockpiling inventory in the U.S. to mitigate the impact of tariffs.
The premium automaker's car and van sales declined 7% in the first quarter, led by 10% drops in both Europe and China, although sales increased 1% in the U.S. market.
The company's sales declined 3% last year, primarily due to a 7% decrease in China.
Mercedes reported a first-quarter profit margin for its car business of 7.3%, down from 9% in the same period last year.
Group earnings before interest and taxes plunged 41% year-on-year to 2.3 billion euros in the quarter.
As part of its bid to regain lost market share in China, Mercedes unveiled a new all-electric luxury limousine van series called "Vision V" last week at the Shanghai car show.
