Recent reports have suggested that Mercedes-Benz was considering cutting some of its least expensive models in the U.S. to cope with the expected shocks from planned tariffs, but the automaker has made clear that it has no such plans. It denied reports from Bloomberg News, saying they were “without any merit.”
The automaker continued, saying, “Mercedes-Benz continues to seek sales growth for its highly desirable vehicles.” While the scope of the tariffs is yet to be announced, they are widely expected to lead to higher car prices and fewer vehicle choices. Automakers may be able to absorb some of the increased costs, but the ultra-slim margins on less expensive models make them less able to be sold without a markup.
This week, Mercedes told analysts on its quarterly investor call that it was accumulating inventory ahead of President Trump’s tariff announcement but also noted that it was weighing further measures to mitigate the impacts of the trade actions.
Mercedes has a reasonably strong manufacturing presence in the U.S., but it relies on imported components for a large portion of that process. The tariffs will likely allow credits for U.S.-made goods, but they could have an outsized impact on not only imported completed vehicles, but also those for which Mercedes imports a large number of expensive parts, like engines and hybrid components.
[Images: Mercedes-Benz]
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