Mercedes Shuts Down Reports That It Considered Pulling Its Most Affordable Models from the U.S. Market
Recent reports have suggested that Mercedes-Benz was considering cutting some of its least expensive models in the U.S. to cope with the expected shocks from planned tariffs, but the automaker has made clear that it has no such plans. It denied reports from Bloomberg News, saying they were “without any merit.”
The automaker continued, saying, “Mercedes-Benz continues to seek sales growth for its highly desirable vehicles.” While the scope of the tariffs is yet to be announced, they are widely expected to lead to higher car prices and fewer vehicle choices. Automakers may be able to absorb some of the increased costs, but the ultra-slim margins on less expensive models make them less able to be sold without a markup.
This week, Mercedes told analysts on its quarterly investor call that it was accumulating inventory ahead of President Trump’s tariff announcement but also noted that it was weighing further measures to mitigate the impacts of the trade actions.
Mercedes has a reasonably strong manufacturing presence in the U.S., but it relies on imported components for a large portion of that process. The tariffs will likely allow credits for U.S.-made goods, but they could have an outsized impact on not only imported completed vehicles, but also those for which Mercedes imports a large number of expensive parts, like engines and hybrid components.
[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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The Oracle of Asheville sees a future of domestic manufacturing and devastating hurricanes and wildfires locally.
It has been an automotive truism that it is easier for a budget or mainstream brand to reach higher than it is for luxury brands to reach lower. Mercedes is a case in point - at least in North America.