Main points
- Mercedes-Benz Group's profit for 2025 fell by 57% to 5.8 billion euros, well below the forecast of 6.6 billion euros.
- The company plans to cut costs in 2026 and launch new models, expecting revenue to remain at the previous year's level.
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German carmaker Mercedes-Benz Group reported a sharp drop in annual profit, warning that difficult times lie ahead.
What is happening with the Mercedes-Benz Group?
And this after a year of fierce competition from Chinese manufacturers and costs due to global tariffs, as CNBC writes.
The automaker reported operating profit of 5.8 billion euros ($6.9 billion) for 2025, down 57% from the previous year. The result was well below analysts' expectations of 6.6 billion euros.
Mercedes-Benz Group noted that the financial performance was affected by:
- currency fluctuations;
- competition in China;
- as well as about 1 billion euros ($1.2 billion) in customs-related costs.
In a dynamic market environment, our financial results remained within the forecast thanks to a clear focus on efficiency, speed and flexibility,
– said Mercedes-Benz Group CEO Ola Källenius.
The results come amid a host of challenges for European auto giants, from rising production costs and supply chain disruptions to regulatory pressure and a difficult transition to electric vehicles. The Munich-listed company's shares were down about 1% in afternoon trading, partly recovering earlier losses.
Please note! In total, stocks have fallen by about 7% since the beginning of the year.
Mercedes-Benz Group has announced plans for further cost reductions in 2026 and a strong wave of new model launches. The company is targeting an adjusted sales margin of 3 to 5 percent for its Mercedes-Benz Cars division, compared to 5 percent growth recorded in 2025.
The company also expects revenue to remain at the previous year's level after reaching 132.2 billion euros in 2025. And group earnings before interest and taxes (EBIT) are forecast to be “significantly higher” than a year earlier.
The group's industrial business' free cash flow is expected to be slightly lower than the 2025 figure of €5.4 billion .
Recall that Honda Motor Co. also announced a loss of profits. Reuters reports this.
Its third-quarter operating profit fell 61.4% to 153.4 billion yen ($987.07 million), below the average forecast of 174.5 billion yen.
Important! The company suffered losses of about a billion dollars, in particular from United States import tariffs.
What else should you know about cars and business?
- Volkswagen is currently actively ahead of Tesla in electric vehicle sales in Europe. In 2025, Volkswagen's battery electric vehicle sales in European countries increased by 56% compared to 2024. Tesla vehicle registrations fell by 27% over the same period.
- At the same time, thanks to intermediaries from China, Russian car dealers are bypassing Western sanctions and buying new cars – Toyota, BMW, Mercedes, etc. At the same time, Mercedes-Benz, BMW, Volkswagen, etc. have announced that they are banning sales to Russia and fighting unauthorized exports.