By Dominic Chopping

Mercedes-Benz first-quarter sales fell slightly on year, mainly due to weakness in China, but the margin should land within the guided full-year range of 6%-8%, a Mercedes spokesperson confirmed.

The comments were disclosed on a company call with analysts on Monday.

First-quarter sales in Europe will probably be lower on year, while the U.S. saw continued solid sales momentum, the spokesperson said. In China though, the company maintains its cautious view and expects lower sales, the spokesperson added.

Analysts at UBS said in a note that the more cautious tone on volumes is slightly negative, especially as the company presumably pre-shipped some vehicles ahead of the April 2 U.S. tariff deadline.

On the reassuring side, margins appear at least in line with expectations for the quarter, which points to progress made on the cost side, UBS added.

For its top-end vehicles, Mercedes expects a solid first-quarter performance for its AMG models and G-Class. That would mean its top-end vehicles made up 14%-15% of its total sales in the quarter, after they represented 14% of total sales in 2024.

Continued strong momentum of its plug-in hybrid vehicles mean its electrified models made up a total share of sales within its full-year guidance range of 20% to 22%.

In its vans business, Mercedes said it could potentially see a significant drop in first-quarter sales due to a strong on-year comparison.

Nevertheless, it still expects a first-quarter adjusted margin in the 10%-12% for its vans unit, with potential for it to land at the upper end of the range due to a solid mix and pricing effect.

Ahead of President Trump's 25% tariff on automotive imports from Wednesday, the Mercedes spokesperson said investors should extrapolate its previous planning assumptions to gain an understanding of the potential impact on the German carmaker.

Mercedes had previously estimated that an automotive tariff between the U.S. and Europe of up to 10% would reduce its car margin by up to 100 basis points, before implementing any actions to mitigate the impact.

Berenberg analyst Romain Gourvil said in a note to clients that based on that assumption, the 25% U.S. tariff could see the car margin reduced by 330 basis points.

Including other U.S. tariffs on Mexico, Canada and China, Berenberg expects between 35% and 40% of Mercedes-Benz's operating profit this year could be at risk.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

April 01, 2025 08:27 ET (12:27 GMT)

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