Mercedes-Benz ramps up U.S. inventory ahead of April tariffs

Mercedes-Benz is aggressively building up inventory levels in the United States, both at the wholesale level and at dealerships, in preparation for the new tariffs that are expected to take effect on April 3, company executives shared on a call with analysts on Monday, according to a note from Bernstein Research.

When asked about its pricing strategy in light of the upcoming tariffs, executives said no automaker operates in isolation, implying that Mercedes-Benz will monitor and react based on what its competitors do once the tariffs are implemented.

The company expects the planned 25% tariff on auto imports to impact its gross profit margin by about 2.5 percentage points, before any mitigation measures are applied. Mercedes-Benz's first-quarter results are expected to be 1.57 billion euros in profit with a margin of 6.4%, in line with the company's full-year guidance. However, sales in the quarter were down slightly from the same period last year, mainly due to weaker performance in China and Europe.

In 2024, Mercedes-Benz Cars and Vans sold a total of 374,000 vehicles in the United States, accounting for 15.6% of the company's global sales.

Faced with challenges from US tariffs, European automakers, including Mercedes-Benz, are looking to increase production in the United States to mitigate the impact. Mercedes-Benz CFO Harald Wilhelm said the company will localize more production at its plant in Tuscaloosa, Alabama, to protect itself from rising trade tensions.

Despite challenges from the macroeconomic environment and trade policies, Mercedes-Benz maintains its strong new product launch plan, including models such as the Maybach SL and special edition AMG GT, to consolidate its market position and meet diverse customer needs.