BERLIN, April 30 (Reuters) - Mercedes-Benz on

Wednesday reported lower profitability in its cars business in

the first quarter and warned that tariffs could impact its

full-year earnings, as trade tensions forced the luxury carmaker

to scrap its outlook.

The German luxury carmaker reported a profit margin for its

car segment of 7.3%, slipping from 9% in the first quarter of

last year.

Group earnings before interest and taxes (EBIT) plunged by

41% year on year to 2.3 billion euros ($2.62 billion) in the

first three months of 2025.

"The current volatility with regard to tariff policies,

mitigation measures and resulting potential direct and indirect

effects, in particular on customer behaviour and demand, is too

high to reliably assess the business development for the

remainder of the year," the company said in a statement.

The sweeping and erratic tariff regime of President Donald

Trump piles pressure on European carmakers already facing a

swathe of other challenges, including stiff competition from

China and high costs in Europe.

Assuming current trade policies persist, Mercedes

expects its margins in the cars and vans units to be "negatively

impacted", it said in a statement.

($1 = 0.8794 euros)