The German luxury automobile producer Mercedes-Benz Group disclosed on Thursday announced a significant downturn in its full-year profits and cautioned about challenging prospects ahead, after a year impacted by fierce competition from Chinese competitors and international tariff expenses.
The automaker recorded an operating profit of 5.8 billion euros ($6.9 billion) for 2025, representing a 57% reduction compared to the previous year. This figure fell short of analyst projections of 6.6 billion euros.
Mercedes-Benz Group indicated that its earnings were influenced by unfavorable currency fluctuations and rivalry in China, in addition to an estimated 1 billion euro ($1.2 billion) burden from tariff costs.
“In a vibrant market atmosphere, our financial outcomes stayed within our predictions, thanks to our keen emphasis on efficiency, speed, and adaptability,” stated Ola Källenius, chairman of the board of management at Mercedes-Benz Group.
Mercedes-Benz Group revealed plans for additional cost reductions in 2026 along with a series of product introductions, aiming for an adjusted sales return for Mercedes-Benz Cars of 3% to 5%, down from the 5% increase reported in 2025.
Shares of the company listed in Munich dropped 5% during the morning trading session. The stock has decreased by approximately 7% this year.
Looking forward, Mercedes-Benz Group anticipates revenues to stabilize at prior-year levels, following reported revenues of 132.2 billion euros in 2025, while earnings before interest and taxes (EBIT) for the group are expected to be “considerably higher” than the previous year’s figures.
The group’s free cash flow from its industrial operations is projected to be slightly below the 2025 figure of 5.4 billion euros.
The results emerge as European automotive giants grapple with numerous challenges, ranging from escalating production expenses and supply chain interruptions to regulatory pressures and a challenging transition to electric vehicles.
