Mercedes-Benz Won't Pass Tariff Costs Onto Customers
Automakers’ margins are generally very tight, making it difficult for them to absorb the expected price increases from President Trump’s 25 percent tariffs on imported vehicles. Despite that, import-heavy Mercedes-Benz said it would eat the tariff costs, at least for now.
Spokesperson Michael Minielly said, “We continue to monitor the situation closely, are evaluating all options and will adjust to changing market conditions and the competitive landscape if needed. The automaker imports around 35 percent of the vehicles it sells here, so it’s unclear how long Mercedes will be able to sustain the plan. At least the good news is that the European Union appears ready to negotiate with Trump, which could lead to significantly lower tariffs in time.
Mercedes isn’t in a terrible position to weather any challenges brought on by the trade actions. Despite relying on a large number of imported components, the automaker builds several models in the U.S., including the GLE, GLE, EQE, and EQS, making them immune to portions of the tariffs. The company is also working with dealers to clarify pricing and other details, reducing confusion and friction between buyers and the brand.
The decision to absorb tariff costs should help Mercedes, especially considering that some of its competitors have decided to halt imports in the short term to assess the impacts. Audi and Jaguar Land Rover both announced temporary pauses on vehicle shipments, though Jaguar wasn’t planning on shipping many units this year to begin with.
[Images: Mercedes-Benz]
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Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.
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I saw a claim from Mercedes-Benz of Palm Springs that the GLE, GLS, and C-Class are made in Alabama for the US market, with the further claim that the GLS is exported globally from the US. If the numbers from Best Selling Cars Dot Com are accurate, that means over 40% of Mercedes sales in the US are built in Alabama.
They are a remarkably good partner, and they are executing Sloan's strategy.
We know they aren't bulletproof tanks like an early 1980s E-Class, but sounds like Mercedes is doing great by America.
Well since Mercs are a smidge overpriced (cough) this announcement means nothing at all...