Mercedes-Benz Prepares for Potential Trump Trade Tariffs with Cost Reductions and EV Innovations
Mercedes-Benz (MBGAF) is navigating the potential impact of the Trump trade war by implementing cost-cutting measures and promoting electric and hybrid vehicle advancements.
Despite a challenging 2024, CEO Ola Källenius emphasizes Mercedes-Benz's deep American roots and commitment to the US market:
"We're an American company with headquarters in Germany and European origins, but we feel American. We employ over 11,000 people in the US, including two major passenger car operations in Alabama and South Carolina."
Källenius highlights the company's significant footprint in the US, with two-thirds of vehicles produced in its Tuscaloosa plant exported globally.
Addressing the potential tariffs, he notes that the auto industry could face disruptions if they were implemented. Mercedes-Benz imports over half of the vehicles it sells in the US, and 13% of German car exports are destined for America.
The company is prepared to invest heavily in the US and expand its operations, emphasizing its status as a major industrial exporter.
Källenius also expresses concern about the impact of tariffs on consumers and the industry:
"Tariffs would mean higher prices for customers and have adverse effects on US jobs. They are the wrong negotiating tool."
Mercedes-Benz is bolstering profits by reducing production costs by 10% by 2027 and investing in EVs and hybrids. However, 2024 unit sales and operating profits declined compared to the previous year.