Il Nuovo Postiglione - Mercedes-Benz profit plunges on China slump and US tariffs

Net profit at the Stuttgart-based company fell 30.8 percent to hit 1.19 billion euros ($1.38 billion), beating analyst expectations of 1.09 billion euros in a poll by financial data firm FactSet.

"Our third-quarter results are in line with our full-year guidance," Mercedes-Benz boss Ola Kaellenius said.

In July, the firm lowered its outlook for the year after US President Donald Trump's tariff onslaught and said it expected revenue for 2025 to be "significantly below" the 146 billion euros it took in last year.

Car exports from the European Union are subject to a tariff of 15 percent under an EU-US deal unveiled late, July, down from 27.5 percent but far higher than the 2.5 percent in force before Trump launched his trade war in April.

Mercedes-Benz -- which has a plant in Tuscaloosa, Alabama -- also has to grapple with US duties of 25 percent on imports of car parts that come from outside North America.

Sales by volume in key market China meanwhile fell 27 percent in the third quarter, helping drag overall sales down 12 percent.

The country -- also the world's largest car market -- has become a battleground for German carmakers amid a brutal price war and fierce competition from local players like BYD.

Kaellenius told analysts and investors on a call that Mercedes was working closely with Chinese self-driving software firm Momenta to make cars competitive for the local market but said a turnaround was "a multi-year task".

"Looking ahead, we expect the market environment to remain challenging," he said. "Hyper competition in China is not going away anytime soon."

Shares in Mercedes rose six percent as trading got underway in Frankfurt, where trading was overall flat.

D.Ricci--INP