Mercedes-Benz owner issues warning about earnings

Daimler AG cites growing trade war between USA and China as a factor

Daimler AG issues profit warning

Daimler AG, the parent company of Mercedes-Benz, has issued a warning about expected earnings. 

The primary reason for the drop in potential profit comes from the growing trade battle between the United States and China. Following the imposition of tariffs by U.S. President Donald Trump, the Chinese government retaliated with increased import duties on a variety of goods.

Specifically, the Chinese import duties apply to vehicles produced in the United States. Mercedes-Benz has multiple factories and offices throughout the USA, including a production facility in Tuscaloosa, Alabama, which builds SUV models including the GLS and GLE.

Daimler states that as not all of the cars produced in the Alabama factory can be redirected to be sold in other markets, this will have an impact on profits, should demand be reduced. The tariffs themselves will also have an effect, as the company says the full cost of these will not be passed on to customers. 

Other problems for the company have come from complying with the new Worldwide Harmonized Light Vehicles Test Procedure (WLTP) rules regarding fuel consumption and emissions. Other manufacturers have also been affected by this, with Volkswagen making plans to reduce production output to manage the changes. 

The Mercedes-Benz Van division is also likely to see reduced profits, following the need to recall Vito models due to emissions from diesel engines. 

During 2017, Daimler AG recorded net profits of €10.9 billion, representing a 24 percent increase from the previous year. Estimates for 2018 now put profits “slightly below” that achieved in 2017.

Related Articles


Please enter your comment!
Please enter your name here


How to assign a private number plate online

Adding a private number plate to your car is a simple process using the DVLA’s online form. Here's what you need to know.

Tiff Needell returns to TV in new ITV4 motoring show

Lovecars: On the Road sees former Top Gear and Fifth Gear presenter Tiff Needell back on television, driving an array of new cars.

Morgan Plus Four (2020) review

Driving a Morgan Plus Four demands a certain level of commitment. But on the right road, it rewards with good old-fashioned fun.

Rolls-Royce Ghost (2010) review

Short of things to do, we go in search of the nation’s best fish and chips in a Rolls-Royce Ghost. It's how the other half live...