Automatic giants ditch guidance as Trump tariff chaos industry reel

European auto giants reported a sharp drop in profits in the first quarter, with many suspending or cutting financial guidance throughout the year, partly attributeing industry pain to trade tariffs by U.S. President Donald Trump.

The company's update took place shortly after Trump imposed a 25% auto import tax on auto imports in early April.

Trump tried to water the taxes on Tuesday, signing an executive order designed to prevent other separate responsibilities, such as the 25% tariff on steel and aluminum, from “stacking” between each other.

While analysts warn that the rapid changing nature of Trump’s trade tariffs could evade any long-term corporate investment decisions, some automakers appreciate the new stance.

StellantisWith household names including Jeep, Dodge, Fiat, Chrysler and Peugeot, it said Wednesday it is withdrawing its full-year financial guidance due to uncertainties related to tariffs.

It added that the company was “highly interactive” with policymakers regarding tariff policies while taking action to adjust production plans and identify opportunities for improved procurement.

Multinationals reported net revenue of €35.8 billion (USD 40.7 billion) in the first quarter, reflecting a 14% decline in the same period last year.

Germany's Mercedes also canceled its revenue guidance for 2025 and reportedly significantly lowered its first-quarter profits.

The automaker said the full-year reported figures could not be estimated “at the necessary level of certainty”, citing current volatility on tariffs, mitigation measures, and potential direct and indirect effects.

“Assuming the continued existence of current trade policies (earnings before interest and tax) and free cash flow for industrial businesses, as well as sales-adjusted returns for Mercedes-Benz Automobile and Mercedes-Benz vans, will be negatively affected,” the company said in a statement.

Rella Suskin, a stock analyst at Morningstar, said Trump's recent move to reduce auto tariffs has provided “partial relief” for European automakers.

“Tariff adjustments can reduce imports of auto parts by 15%,” Suskin said, noting that about half of the vehicles sold by BMW and Mercedes in the country.

She still added: “Until the durability of tariffs and the increase in quantum, automakers cannot make long-term capital allocation decisions.”

public Not joined the ranks of top European original equipment manufacturers (OEMs).

However, Europe's largest automaker does say it expects returns on sales, cash flow and net liquidity to take place at the minimum of its annual forecast, citing increased trade restrictions, political uncertainty and emission regulations.

Volkswagen's operating profit on Wednesday was 2.9 billion euros in the first three months of the year, down 37% from the same period last year.

“Given the current global economic situation, focusing on the leverage we control is even more important,” Arno Antlitz, chief financial officer and chief operating officer of Volkswagen Group, said in a statement.

He added: “This means complementing our excellent product range with a competitive cost basis so we can ensure success in rapidly changing global markets.”

Sweden-based Volvo Cars has waived financial guidance for 2025 and 2026, citing tariff pressure on the global automotive industry.

Owned by China's Geely Holding, the automaker is considered one of the most Trump-treasured automakers because it imports most hybrid and electric models from Europe.

In addition to a sharp drop in operating profit in the first quarter, Volvo Cars announced a cost-cutting plan for Sweden Kronor ($1.87 billion) on Tuesday. It said the so-called “cost and cash action plan” would include reducing investment in global operations and layoffs.

Volvo Cars CEO Håkan Samuelsson, who spoke to CNBC's “early European version” before Trump proposed automatic tariffs, said the additional tariff turbulence made it “hard” to provide guidance to investors.

“We certainly need to see some kind of trade deal with the United States for a long time, otherwise, it is certainly very difficult for American businesses,” Samuelson said.

Germany's PorscheVolkswagen Group owns a majority stake, slashing its sales and profit margin forecasts in part due to Trump’s tariff impact.

The company said on Monday that it now expects sales revenue in fiscal 2025 to be between 37 billion and 38 billion euros, down from the previous forecast of 39 billion to 40 billion euros.

“Introduction of U.S. import tariffs would have a negative impact in the months of April and April 2025 and May 2025,” the company said in a statement. “However, the adjusted forecasts do not take into account the further impact of the introduction of U.S. import tariffs.”

It added: “It is not possible to conduct a reliable assessment of the impact of the fiscal year at this time.”

– Jenni Reid of CNBC contributed to the report.