Several major car manufacturers, including Mercedes-Benz and Stellantis, have decided to stop providing their annual financial forecasts. This decision comes as uncertainty over tariffs continues to grow. General Motors and Volvo, both based in Michigan, are also among the companies suspending their guidance for investors.
This announcement was made on Wednesday, shortly after President Donald Trump signed an executive order aimed at easing some of the effects of the auto tariffs he had imposed earlier in the month. The tariffs had raised concerns among automakers about their financial outlook and operations.
Stellantis, which owns brands like Jeep, RAM Trucks, and Fiat, stated that it is halting its financial guidance for 2025 due to the unpredictable nature of tariff policies and the challenges in forecasting market demand. John Elkann, the chairman of Stellantis, emphasized the company’s commitment to working with the U.S. government to support a competitive auto industry.
The situation has led to layoffs at Stellantis, including a recent temporary layoff of 900 workers, attributed to the uncertainty surrounding the tariffs. Antonio Filosa, the COO for Stellantis in the Americas, noted that the company would assess the longer-term impacts of these tariffs while taking immediate actions to address the situation.
In its first-quarter earnings report, Stellantis reported a significant 14% drop in sales, totaling $40.7 billion. Similarly, both Mercedes-Benz and Volkswagen saw considerable declines in their profits during the same period. Mercedes-Benz reported a nearly 43% drop in net profit to $1.9 billion, citing volatility in tariff policies as a reason for the difficulty in forecasting business development.
Volkswagen also faced challenges, with a 40.6% decrease in net profit to $2.49 billion. The company indicated that it expects to operate at the lower end of its guidance for the year due to increased competition and ongoing trade tensions.
The broader market is feeling the impact as well, with around 40 companies globally adjusting their financial forecasts in light of the current economic climate. For instance, Snap, the social media company, also chose not to provide future guidance, reflecting a slowdown in advertising spending linked to tariff concerns.
In addition to the existing tariffs on imported vehicles, automakers are preparing for new tariffs on foreign auto parts that are set to take effect soon. Trump’s recent policy changes aim to reduce the burden on companies by allowing them to pay only the higher of the two tariffs on vehicles and materials. However, analysts warn that these changes may not alleviate the industry’s frustrations, as the complexities of U.S. manufacturing and supply chains remain challenging.
As the automotive industry grapples with these uncertainties, many companies are left reassessing their strategies and the potential impacts of ongoing tariff policies.