Mercedes-Benz faces a $1.2 billion tariff blow, leading to a 57% drop in annual operating profit due to China competition and currency challenges. Despite revenue staying flat at €132.2 billion, margins fell below expectations. Shares fell 5% before recovering slightly.

The luxury automaker plans cost cuts and product expansion to combat challenges. With China car sales dropping and a price war among EV makers, Mercedes struggles to maintain profitability. Tariffs in the West and price pressure in the East test the company’s resilience.

Mercedes aims for a 3% to 5% return on sales, a far cry from previous margins. The shift to electric vehicles presents uncertainties, while restructuring costs mount. As European automakers navigate trade tensions and technology shifts, investors monitor China sales and margins closely for signs of recovery.

The future remains uncertain for Mercedes as it fights to defend profitability amidst ongoing trade disputes and competitive pressures. With a focus on cost-cutting and product innovation, the company aims to rebuild margins and restore investor confidence. However, challenges persist in a complex global landscape.

Read more at Yahoo Finance: Mercedes’s Tariff Nightmares Come True as China Eyes a Slice of the Pie