Operating Profit at 3.562 Billion Euros (5.69 Trillion Won)
Down 54.9% Compared to the Same Period Last Year
Following the impact of trade conflicts originating from the United States, Mercedes-Benz (Benz) has reported a sharp decline in business performance, following a similar trend seen at German automaker Volkswagen.
The Mercedes-Benz star logo at the entrance of the Mercedes-Benz factory located in Sindelfingen, Baden-W?rttemberg, southwestern Germany. Photo by Yonhap News
On July 30 (local time), Benz announced that its net profit for the first half of this year was 2.688 billion euros (4.29 trillion won), a decrease of 55.8% compared to the first half of last year. Operating profit also fell by 54.9% to 3.562 billion euros (5.69 trillion won) compared to last year.
Passenger car sales volume decreased by 8.7% over the same period, from 497,000 units to 454,000 units. The company stated, "Sales volume was significantly lower than last year, and we expect the second half to be similar to the first half."
In recent years, Benz has faced dual challenges: a decline in demand for German luxury cars in its largest market, China, and the imposition of a 27.5% U.S. auto tariff since April this year. In the second quarter, sales volume dropped by 14% in North America and 19% in China.
Benz estimates that, due to the reduction of tariffs to 15% following an agreement between the United States and the European Union (EU), it will incur costs of 362 million euros (580 billion won) this year. The company presented an operating profit margin forecast for the automotive division of 4?6%. During the first quarter earnings announcement in April, Benz did not provide a performance outlook due to tariff uncertainties.
Volkswagen Group, Germany's largest automaker, which released its results earlier, reported a 29.4% decrease in operating profit and a 36.3% decrease in net profit in the second quarter. Volkswagen stated that U.S. auto tariffs resulted in costs of 1.3 billion euros (2.1 trillion won).
Porsche, the luxury sports car brand, saw its automotive segment operating profit (excluding finance) fall by 91% in the second quarter. On this day, Porsche lowered its operating profit margin forecast for this year from the previous 6.5?8.5% to 5.0?7.0%. Bloomberg News reported that this is the third time Porsche has revised its guidance downward this year alone. Until last year, Porsche was considered a key profit contributor within the Volkswagen Group, consistently recording an operating profit margin of around 15% annually.
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