Car Companies Reveal Steep Costs of US Tariffs in Trade War
Car manufacturers around the world, including Mercedes-Benz, Porsche, and Aston Martin, are facing significant financial losses due to the escalating trade war between the US and its trading partners. The tariffs imposed by the US have had a devastating impact on sales, profits, and production levels for these companies, with Mercedes-Benz reporting a 9% drop in sales to 453,700 units in the second quarter.
Key Takeaways:
- Mercedes-Benz estimates that US tariffs will cost it €362m (£313m) in the second quarter, citing a 9% year-on-year drop in sales to 453,700 units.
- Porsche has incurred an additional €400m in costs in the first half of the year, attributed to the introduction of increased US import tariffs.
- Aston Martin has cut production and limited exports to the US to mitigate the financial impact of tariffs, which have now been reduced to 10% under the UK's trade deal with the US.
- Tariffs have cut profits by about 1.5 percentage points at Mercedes-Benz, equivalent to a tariff effect of €362m on the division's adjusted operating profit.
- Adrian Hallmark, Aston Martin's chief executive, stated that cutting production was necessary to avoid the tariffs of 27.5%.
- The UK's trade deal with the US has reduced tariffs to 10% for the first 100,000 exports on a first-come, first-served basis.
Statistics:
- Mercedes-Benz reported a 9% drop in sales to 453,700 units in the second quarter.
- Porsche incurred an additional €400m in costs in the first half of the year due to US import tariffs.
- Tariffs cut profits by about 1.5 percentage points at Mercedes-Benz.
- The UK's trade deal with the US reduced tariffs from 27.5% to 10% for the first 100,000 exports.
- Average tariffs imposed by the US: 27.5% (pre-trade deal) and 10% (post-trade deal).
Sources:
- Reuters
- Mercedes-Benz
- Porsche
- Aston Martin