Frankfurt (Germany) (AFP) – The car manufacturer Mercedes-Benz announced on Thursday a net profit at its lowest level since the pandemic and a drastic fall in its margins in 2025, a new sign of the crisis experienced by the German automobile industry stuck between customs duties and tough Chinese competition.

Published on: 02/12/2026 - 1:37 p.m.

The group's net profit was almost halved to 5.1 billion euros last year, its lowest level since 2020, a year marked by the Covid-19 pandemic, he said in a press release.

The operating margin of the passenger car sector, a key indicator for the company which focuses particularly on luxury models, collapsed to 3.7%, while the group was counting on a range between 4 and 6%.

This is partly explained by American customs duties, which weighed "around a billion euros", indicated the group's financial director Harald Wilhelm during a press conference. He expects a higher amount in 2026, with these rights expected to apply throughout the year.

The deterioration of the margin rate in the automobile industry dates back several years, going from 12.6% in 2023 to 8.1% in 2024.

For 2026, Mercedes-Benz is targeting a historically low range of between 3 and 5%, at levels comparable to those recorded at its competitor Volkswagen, which sells much cheaper cars.

The decline continues in China

For the Stuttgart company, the year 2025 was marred by a fall in its car deliveries of 9% to 1,800,000 units. Sales of electric cars recorded the same decline.

Overall turnover, which also includes sales of vans and financing activities, fell 9.2% year-on-year to 132.2 billion euros.

“The reduction in sales is mainly due to fierce competition in China,” Mercedes-Benz CEO Ola Källenius said on Thursday.

In China, car deliveries fell by 19% last year, and are expected to continue their decline in 2026, according to the boss.

Mercedes-Benz must face unprecedented competition from increasingly well-positioned local brands such as BYD, particularly in electromobility. The Chinese giant sold 2.26 million electric vehicles in 2025, a new record for this sector.

“The price gap between high-end Chinese brands and premium German manufacturers must be reduced significantly to succeed in the recovery in China,” said German automotive expert Ferdinand Dudenhöffer, for whom 2025 is a year “to forget” for Mercedes-Benz, as for “almost all car manufacturers”.

In an attempt to return to growth, the chairman of the board of Mercedes announced the "largest offensive of product launches in the history of the company" in the coming years.

In total, the group plans to offer 40 new models starting this year - electric SUVs, large sedans, electric compacts, AMG sports cars, etc. - over a period of three years.

At the end of January, it presented the latest version of its most high-end model, the S-Class, without however offering a 100% electric engine.

Around 12:10 GMT, the group's share price, listed in Frankfurt, fell 2.38% to 56.51 euros.

© 2026 AFP

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