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Mercedes-Benz (MBG.DE) has no plans to be whipsawed by Trump's tariffs.
CEO Ola Källenius told Yahoo Finance on a call Monday afternoon that the company had no plans to raise prices to offset tariffs from the Trump administration. By the same token, Källenius said the company will not restore the financial outlook it withdrew several weeks ago amid the uncertainty.
"What we have decided to do in this current environment is to send a signal of stability towards our customers, but also our business partners," Källenius said. "And we will see how things develop. We are in the position that we don't have to make hasty decisions on things like that [price increases], and we won't. So I don't want to pull out the crystal ball now and say what's the world going to look like six months from now, but our priority for the US market will be long-term growth, taking care of our great customer base."
The Trump administration tossed a small bone to global automakers several weeks ago, moving to relax some of the 25% tariffs slapped on autos and auto parts.
The new executive order allows car companies to be reimbursed for up to 3.75% of the value of US-assembled vehicles to help offset the cost of tariffs in year one. In year two, the rebate would be 2.5%, before phasing out in year three.
Read more: The latest news and updates on Trump's tariffs
More than half of the 374,000 vehicles Mercedes-Benz sold in the US last year were imported, according to the company. About 13% of German car exports go to the United States, more than to any other country, according to data from the German auto association VDA.
Källenius added that Mercedes will start producing its top-selling GLC SUV at its plant in Tuscaloosa, Ala., in a bid to produce locally and sidestep some tariffs.
Amid the challenging backdrop, Mercedes-Benz said in late April that first quarter profits fell 43% from a year ago to 1.73 billion euros. Revenue declined 7.4% year over year to 33.22 billion euros.
The company's car sales declined 4% in the first quarter. While sales in North America advanced 1%, a 7% decline in Europe and a 10% decrease in China overshadowed the minor gain.
"No," Källenius said regarding whether guidance will be restored as more clarity on tariffs has been received. "We decided in our quarter one call to say this is a situation where it almost feels like there's new information every day, or certainly every week, that if you don't have to change your mind four times in a month, it doesn't make any sense."
