Mercedes shares fall 5% after full-year earnings halve on tariffs, China competition

Core Viewpoint - Mercedes-Benz Group reported a significant decline in full-year profit and anticipates challenging conditions ahead due to competition from Chinese rivals and global tariff costs [1][2]. Financial Performance - The company posted a full-year operating profit of 5.8 billion euros ($6.9 billion) in 2025, marking a 57% decrease from the previous year and falling short of analyst expectations of 6.6 billion euros [2]. - The earnings were impacted by foreign exchange challenges, competition in China, and a reported 1 billion euro ($1.2 billion) hit from tariff costs [2]. Strategic Response - The chairman of the board of management stated that the financial results remained within guidance due to a focus on efficiency, speed, and flexibility [3]. - The company plans to implement further cost cuts in 2026 and introduce a series of new products, aiming for an 8% to 10% profit margin in its auto division [3]. - Following the announcement, shares of the Munich-listed company fell by 5.3% during morning trading [3].