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News

Mercedes-Benz Holds Strong in Q2, Despite Falling Sales and Tariff Turmoil

Mercedes-Benz Group AG demonstrated resilience in the face of global economic headwinds, reporting solid financial performance for the second quarter of 2025 despite rising tariffs and a dynamic market environment. While the auto industry contends with geopolitical tensions and shifting trade policies, Mercedes-Benz remains focused on intelligent product development and operational efficiency.

“We achieved robust financial results in the second quarter given the dynamic business environment,” said Ola Källenius, CEO of Mercedes-Benz Group AG. “The best response is to stay on course to deliver desirable and intelligent products, while keeping a tight grip on costs.”

The numbers reinforce that strategy. The Group posted a free cash flow of €1.9 billion in its industrial business for Q2, up from €1.6 billion in Q2 2024. Net liquidity rose to €30.8 billion, reflecting careful financial stewardship amidst volatility. However, group EBIT was significantly impacted by €715 million in one-off adjustments related to efficiency programs and M&A transactions, notably including the sale of operations in Argentina.

Mercedes-Benz Cars: Sales Dip, Hybrids Rise

Mercedes-Benz Cars faced a complex quarter. With unit sales down 9% year-on-year to 453,700 vehicles, the brand was clearly not immune to a cooling Chinese market and the pressure of new tariffs. Still, the company’s strategy of stock management and cost controls helped deliver an adjusted EBIT margin of 5.1% in Q2 and 6.2% for the first half of 2025. Excluding tariff effects, the return on sales would have stood at 6.6%.

Plug-in hybrid (PHEV) demand proved a bright spot, surging 34% in the quarter. Combined xEV sales rose 4%, indicating continued consumer interest in electrification, even as full EV adoption faces regulatory and infrastructure hurdles in certain markets.

Top-end vehicles — a core pillar of the Mercedes luxury brand identity — accounted for 14.3% of overall car sales. Yet the softer pricing environment and lower unit sales dented profitability, leading the company to revise its full-year RoS guidance to between 4% and 6%.

Mercedes-Benz Vans: Electric Uptick in a Tough Market

Mercedes-Benz Vans also saw sales volume decline 10% year-over-year in a competitive market, delivering 93,400 units in Q2. Nonetheless, adjusted EBIT margins remained strong at 10.4% for the quarter and 11.0% in the first half, bolstered by a 32% jump in electric van sales.

Looking ahead, the vans division is expected to outperform its first-half results in H2, but full-year sales are projected to fall significantly below 2024 levels. The revised guidance sets the return on sales between 8% and 10%.

Mercedes-Benz Mobility: Steady and Stable

The Group’s financial services arm, Mercedes-Benz Mobility, posted an adjusted return on equity of 8.9% in Q2 and 8.8% for H1, slightly ahead of the previous year. Efficient asset management and gains from financial investments helped offset a challenging lending environment and margin compression.

2025 Outlook: Tariff Pressure and Strategic Investments

Despite a solid first half, Mercedes-Benz has lowered its full-year outlook across key metrics, primarily due to tariff implications and anticipated lower unit sales at both Cars and Vans divisions.

  • Mercedes-Benz Cars: Full-year unit sales are now expected to fall significantly below the 1.98 million recorded in 2024. Adjusted RoS is guided at 4–6%, down from 8.1% last year.
  • Mercedes-Benz Vans: Expected to finish the year well below 2024’s 406,000 units, with a revised RoS forecast of 8–10%.
  • xEV Share: Electrified vehicle share is projected to increase to 20–22% for Cars (up from 19%) and 8–10% for Vans (up from 5%).
  • Investments: In contrast to the sales outlook, investments in property, plant, and equipment are set to rise significantly, particularly for Mercedes-Benz Cars and Vans. R&D spending will remain at the prior-year level for Cars and increase significantly for Vans.

Strategic Focus: Next Level Performance

Källenius emphasized that the company’s Next Level Performance program goes beyond cost-cutting. It aims to build long-term resilience through operational agility and a sharper focus on future product development.

“By using our global production footprint intelligently and executing our Next Level Performance programme, we’re adapting to new geopolitical realities,” said Källenius.

As the automotive world contends with shifting trade dynamics, evolving customer expectations, and accelerating electrification, Mercedes-Benz is staying the course — disciplined in execution, focused on premium innovation, and increasingly selective in where and how it competes globally.

Source: Mercedes-Benz

News

Porsche Navigates Turbulent Terrain in H1 2025, Eyes Resilience and Long-Term Growth

In the face of economic headwinds and shifting global dynamics, Porsche AG has reported a significant decline in financial performance for the first half of 2025, yet remains steadfast in its strategic recalibration for a more resilient future.

The Stuttgart-based sports car icon posted group sales revenue of €18.16 billion, down from €19.46 billion in the same period last year. Group operating profit fell sharply to €1.01 billion, a stark contrast to the €3.06 billion recorded in H1 2024. This translated to a group operating return on sales of just 5.5%, down from a robust 15.7% year-on-year.

A New Era of Challenges

“We continue to face significant challenges around the world,” said Oliver Blume, Chairman of the Executive Board of Porsche AG. “And this is not a storm that will pass.” Blume cited unexpected global shifts and the need to reevaluate past strategic decisions as drivers behind the company’s ongoing transformation.

According to Blume, three key pressure points have reshaped Porsche’s current business landscape: a sharp decline in premium and luxury car demand in China, US import tariffs that have squeezed margins, and a slower-than-expected global transition to electric mobility. These dynamics have affected not only Porsche’s balance sheet but also its operational approach.

Strategic Recalibration Underway

In response, Porsche has initiated sweeping measures to streamline operations and bolster future profitability. In the first half of 2025 alone, the company incurred special expenses of €200 million related to organizational realignment, and €500 million for battery development and production. Additionally, €400 million was absorbed in customer price protection amid new US import tariffs.

Dr. Jochen Breckner, Executive Board Member for Finance and IT, emphasized the goal: “The aim of our strategic realignment is to strengthen our profitability and resilience.” Talks with employee representatives on a second wave of cost-efficiency measures are set to begin in the second half of the year.

Deliveries and Electrification Progress

Despite economic challenges, Porsche delivered 146,391 vehicles worldwide in the first half of 2025. Electrified models made up 36.1% of total deliveries, with 23.5% fully electric and 12.6% plug-in hybrids. Europe led the charge with an electrification rate of 57%, surpassing the company’s IPO-era targets.

The Macan remained Porsche’s best-selling model, with 45,137 units delivered. The brand also set new delivery records in North America and emerging markets, showing regional resilience amidst global uncertainty.

However, automotive net cashflow fell to €394 million, compared to €1.12 billion last year, with a cashflow margin of 2.4%, down from 6.3%.

Innovation and Recognition

Porsche’s push into advanced battery tech saw a major milestone with its subsidiary, V4Smart GmbH, ramping up its second production line in Nördlingen, Germany. This, alongside the Ellwangen site, forms Europe’s only active high-performance round cell production network.

Meanwhile, the brand continued to shine in quality and motorsport. Porsche ranked first in the U.S. J.D. Power APEAL study for customer satisfaction and secured a double championship victory at the Formula E season finale in London. The company also claimed another class win at Le Mans and a dramatic second place overall with the Porsche 963.

Revised Outlook, Grounded Optimism

Following new EU-U.S. agreements on import tariffs, Porsche has revised its 2025 outlook. While the company expects import duties of 15% starting August 1, it plans countermeasures, including selective price adjustments to absorb the financial impact.

Despite the rocky first half, Porsche maintains its forecast of €37–38 billion in annual group revenue. Profitability expectations range from a 5–7% group return on sales and a 3–5% automotive net cashflow margin, depending on the effectiveness of mitigation strategies and market recovery.

“Our completely revamped product range is very well received by our customers,” Blume added. “We expect that we will begin to see positive economic momentum again from 2026 onwards.”

Source: Porsche

News

Stellantis H1 2025 Revenues Down €11 Billion

Stellantis N.V. has reported a challenging first half for 2025, posting net revenues of €74.3 billion — a 13% decline compared to H1 2024. The drop, largely driven by weakened performance in North America and Enlarged Europe, was compounded by foreign exchange pressures, industry tariffs, and a sharp dip in European light commercial vehicle (LCV) volumes. Despite the headwinds, the company is signaling a pivot, with a new CEO at the helm and a fresh product wave underway aimed at reigniting momentum.

Changing of the Guard: Antonio Filosa Takes the Wheel

On June 23, 2025, Antonio Filosa officially assumed the role of CEO, following a unanimous appointment by the Stellantis Board in late May. With a reputation for people-first leadership and an extensive internal track record, Filosa is tasked with steering the 14-brand auto giant through an increasingly volatile global market.

In one of his first major moves, Filosa unveiled a restructured leadership team featuring a mix of proven executives and rising talent, many of whom are taking on expanded roles for the first time. The reshuffle reflects a strategic emphasis on operational agility and a sharper customer focus. Filosa’s confirmation as an executive director and Board member was finalized at the Extraordinary General Meeting held on July 18.

New Metal Hits the Market Amid Commercial Recovery Push

While the financials show a company under pressure, Stellantis is betting on product-led growth to drive recovery. The first half of 2025 saw the launch of four new models — the Citroën C3 Aircross, Fiat Grande Panda, Opel/Vauxhall Frontera, and the Ram ProMaster Cargo BEV — alongside key updates to volume drivers like the Ram 2500/3500 Heavy Duty, Citroën C4/C4X, and Opel Mokka.

These efforts are already bearing fruit, with Stellantis gaining 127 basis points in EU30 market share versus the second half of 2024. North America also showed signs of life with improved order books, suggesting a stronger performance ahead.

Looking forward, Stellantis is doubling down on its model offensive, with 10 new vehicles slated for launch in 2025. These include three highly anticipated STLA Medium platform products — the Jeep Compass, Citroën C5 Aircross, and DS No8 — set to join the already-debuted Peugeot 3008, 5008, and Opel/Vauxhall Grandland in the second half of the year.

The Ram brand is also responding to customer demand, confirming the return of the 5.7-liter HEMI® V-8 in the 2026 Ram 1500, arriving at dealerships in late 2025. Other key returns include the hybrid Jeep Cherokee and the ICE-powered Dodge Charger SIXPACK, both of which have been on hiatus since 2023. The new four-door Charger Daytona is also set to expand the iconic muscle car’s lineup.

Peugeot thrilled fans with the return of the GTi badge, unveiling the all-new 208 GTi at the 24 Hours of Le Mans in June. Meanwhile, in South America, the Fiat Titano pickup has been relaunched in Argentina with new powertrain options and is now being produced locally in Córdoba.

Tariff Pressures and Strategic Planning

The global trade environment remains a drag on Stellantis’ performance. The company now estimates its net tariff impact for 2025 at around €1.5 billion, with €0.3 billion already absorbed in H1. Stellantis says it remains actively engaged with policymakers and is continuing long-term scenario planning to mitigate future trade-related risks.

H2 2025 Outlook: A Measured Rebound in Sight

Despite a bruising first half, Stellantis is reintroducing financial guidance for H2 2025. It expects an increase in net revenues, low-single-digit adjusted operating income (AOI), and improved industrial free cash flow (FCF), assuming no major changes to current trade policies.

In a statement, Filosa remained cautiously optimistic:

“My first weeks as CEO have reconfirmed my strong conviction that we will fix what’s wrong in Stellantis by capitalizing on everything that’s right – starting from the strength, energy and ideas of our people, combined with the great new products we are now bringing to market.

2025 is turning out to be a tough year, but also one of gradual improvement.”

As the company battles rising external pressures and internal transformation, one thing is clear — Stellantis is not standing still. With new leadership, a refreshed portfolio, and a resolve to adapt, the second half of 2025 could mark the beginning of a new chapter.

Source: Stellantis