Mercedes-Benz Group reported a significant decline in profitability for 2025, with net profit falling to €5.3 billion, down nearly 49% from the previous year.
The results reflect the lowest annual profit since the Covid-19 period, driven by US tariff impacts, intense competition in China, and negative currency effects. The figure exceeded some analyst expectations but underscored ongoing headwinds in key markets.
Group operating profit more than halved to €5.8 billion, a 57% reduction, while revenue decreased 9% to €132.2 billion. Adjusted EBIT stood at €8.2 billion, compared with €13.7 billion in 2024, with the cars division recording a 5% adjusted return on sales against forecasts of around 5.4%.
The company absorbed around €1 billion in tariff costs during the year, with expectations of a higher impact in 2026 due to full-year exposure. Shares fell as much as 5.7% following the announcement, closing down 3.1%.
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China, Mercedes-Benz’s largest single market accounting for nearly a third of global car sales, saw volumes drop 19%—the steepest regional decline and the lowest level since 2016. Local competition from domestic EV producers intensified pricing pressures, contributing to lower sales and margins.
The US market faced additional burdens from tariffs on imported vehicles, adding to cost pressures amid a broader global luxury segment slowdown. The group highlighted efforts in cost discipline and a competitive product lineup, including top-end vehicles, to mitigate these factors.
For 2026, Mercedes-Benz anticipates revenue to remain around 2025 levels and projects adjusted return on sales for cars between 3% and 5%, indicating continued margin constraints. Management pointed to new model launches and efficiency measures as drivers for potential recovery.
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