Mercedes-Benz has lowered its outlook for this year again. According to the German car company, this is due to the import duties of US President Donald Trump and the fierce competition in China, where local car brands dominate the market for electric vehicles.
Mercedes-Benz now expects a profit margin of 4 percent this year. Previously, the manufacturer expected 6 percent. That prediction was withdrawn in April due to uncertainty about Trump’s trade policy.
It is severely affected by the import duties. For much of the second quarter, there was a duty of 27.5 percent on cars going from the European Union to the United States. The company also exports SUVs from its factory in Alabama to China. Those SUVs faced local duties of more than 100 percent at the start of last quarter. Those duties were reduced to around 35 percent after the provisional trade agreement between the US and China in mid-May.
Mercedes also warned that group turnover will be significantly lower than last year. In addition to the import duties, the group is also suffering from the fierce price war for electric vehicles in China. As a result, Mercedes is having difficulty finding customers for its more expensive electric models such as the EQS. Chinese car manufacturers such as BYD are also expanding considerably in the stagnating European car market.
The German group had previously announced that it had sold 9 percent fewer cars in the second quarter than in the same period a year earlier. Demand in the US and China, two important markets for the company, was particularly under pressure due to the import duties.