German carmakers Mercedes-Benz and Porsche both issued warnings on Wednesday as new US tariffs and falling sales in China dealt a heavy blow to their second-quarter results.
Mercedes-Benz reported that net profit tumbled nearly 70% to €957 million, missing analyst expectations.
The company pointed to a sharp drop in sales, down 12% in the United States and 19% in China, as well as the financial hit from a 25% US tariff on imported vehicles.
The firm estimated that without the tariffs, its car division’s profit margin would have been 6.6%, compared to the reported 5.1%.
As a result, Mercedes-Benz has lowered its full-year revenue outlook, now forecasting revenue significantly below last year’s €146 billion.
Porsche, meanwhile, was hit with a €400 million tariff cost in the first half of the year.
The luxury brand has trimmed its profit margin guidance, now expecting a return on sales of 5% to 7%, down from a previous range of 6.5% to 8.5%.
Second-quarter operating profit at Porsche slumped 91% to €154 million, as the company faces higher costs and weak demand in key markets.