Frankfurt, Germany: German premium automaker Mercedes-Benz warned Wednesday that a drawn-out conflict in the Middle East could cause shortages of key inputs as it reported tumbling quarterly profits due to fierce Chinese competition.
Traffic in the Strait of Hormuz has slowed to a trickle as Iran and the United States maintain competing blockades, restricting global supplies of energy and raising the cost of smelting industrial metals like aluminium.
Oil is also a key input for plastics and other petrochemical products.
"We're continuously monitoring (the war) and analysing the implications for the supply chain," Mercedes finance chief Harald Wilhelm told reporters on a call.
"If it were to last longer, you could not rule out the possibility of shortages in certain areas, whether of energy or certain commodities that are heavily sourced from the region."
Mercedes said net profit for January to March fell 17 percent from the previous year to 1.43 billion euros ($1.67 billion), hit by difficulties in China.
Stiffer competition in the country, long a steady source of profits for German carmakers, has hurt Mercedes and fellow German automakers.
"We take Chinese competition very, very seriously," Wilhelm said.
"The vehicles, the technology, the packaging -- and of course the price.
To be clear, you get an incredible amount of value for very little money."
