[News Space=Reporter seungwon lee] Mercedes-Benz Korea (CEO Matthias Vaitl, located on the 9th floor of Seoul Square, 416 Hangang-daero, Jung-gu, Seoul) achieved record-breaking revenue of 6.1883 trillion KRW in 2025. However, it is facing an unprecedented situation after being fined 11.2 billion KRW by the Fair Trade Commission (FTC) for unfair customer inducement practices related to electric vehicles, along with criminal charges against the company, including its German headquarters.

In terms of financial structure, the debt-to-equity ratio reached 373%, and it was confirmed that dividends equivalent to the net profit (148.1 billion KRW)—specifically 63.7 billion KRW—flowed out to the top German parent company and local owner-affiliated entities. In operations, warranty costs surged by 17.9% year-on-year to 89.4 billion KRW, increasing the burden of provisions for recalls and free repairs. Furthermore, 11 legal disputes are currently pending (total litigation value of approximately 23.2 billion KRW), including a 20.9 billion KRW damage suit filed by Meritz Fire & Marine Insurance.

Revenue & Profit: Record-High Scale, Improved Inner Stability

According to the audit report filed with the Financial Supervisory Service on April 13, Mercedes-Benz Korea’s 2025 revenue was 6.1883 trillion KRW, an 8.8% increase from the previous year (5.6883 trillion KRW), setting a record since its inception. Profitability also improved; operating profit surged 30.2% to 205 billion KRW (from 157.5 billion KRW), and net profit rose 19.2% to 148.1 billion KRW (from 124.2 billion KRW). The operating profit margin improved by 0.54 percentage points to 3.31%.

Revenue composition consisted of 5.8625 trillion KRW from products (cars and parts) and 325.8 billion KRW from services (maintenance). Retained earnings were recorded at 444.2 billion KRW.

Dividends: 43% of Net Profit Goes Entirely Overseas and to Related Parties

The cash dividends paid by Mercedes-Benz Korea as interim dividends in 2025 amounted to 63.7 billion KRW, which is 43% of its net profit (148.1 billion KRW). Based on its equity structure, approximately 32.5 billion KRW is estimated to have gone to Mercedes-Benz AG (Germany, 51% stake) and approximately 31.2 billion KRW to the domestic owner-affiliated entity, Star Auto Holdings (49% stake). Notably, this is the second consecutive year of such high dividend payouts, meaning 43–48% of net profit has been paid out as dividends for two years in a row.

Related-Party Transactions: 5.1 Trillion KRW in Purchases from HQ

Total purchase transactions with related parties in 2025 reached 5.1399 trillion KRW, of which 5.1302 trillion KRW was purchased from the parent company, Mercedes-Benz AG, effectively accounting for the entire amount. This confirms that Mercedes-Benz Korea's business model is a simple import-sale structure that imports finished vehicles and parts from the German headquarters and supplies them to the domestic dealer network.

Other payments (commissions, services, etc.) totaled 654.8 billion KRW, including 73.6 billion KRW to Mercedes-Benz AG and 489.4 billion KRW to the three domestic dealer firms (Star Motors, Hanseong Motors, Hanseong Motor).

SG&A Expenses: 253.4 Billion KRW, with Warranty Costs as the Key Burden

Total SG&A expenses were 253.4 billion KRW, a 12.8% increase from the previous year. Warranty costs (provisions for free repairs) were 89.4 billion KRW, a 17.9% surge from the previous year (75.9 billion KRW), accounting for 35.3% of total SG&A expenses.

Financial Health: Debt-to-Equity 373%, Current Ratio 153%

As of the end of 2025, Mercedes-Benz Korea’s total liabilities were 1.7698 trillion KRW, and total equity was 474.1 billion KRW, resulting in a debt-to-equity ratio of 373.27%. While this is slightly lower than the previous year (382.65%), it remains significantly higher than the manufacturing industry average. The current ratio stands at 153.1%, indicating relatively sound short-term payment ability.

Legal Risk: FTC Fine and Criminal Charges

The most serious risk involves legal issues. The audit report states that the FTC imposed an administrative fine of 11.239 billion KRW on March 10, 2026, for "unfair customer inducement practices" related to some electric vehicle models (EQE, EQS). Most importantly, the FTC decided to file criminal charges against Mercedes-Benz Korea and the German headquarters with the prosecution, escalating the situation beyond simple administrative sanctions.

Tax Risk: 114.3 Billion KRW Refund After Transfer Pricing Audit

Mercedes-Benz Korea received a refund of 114.324 billion KRW during the period through a mutual agreement procedure with tax authorities regarding a previous transfer pricing tax audit. This suggests that the tax authorities’ judgment that prices were inflated in car transactions with the German HQ was overturned.

Conclusion: A Profit Pipeline Draining to HQ

A corporate finance expert pointed out, "Mercedes-Benz Korea hides a fatal Achilles' heel—structural dependency—behind its flashy 6 trillion KRW revenue. Relying on the German HQ for 93% of its cost of goods sold confirms that it acts merely as a profit pipeline where most of the money earned in the Korean market flows back to the HQ."

They further criticized, "Even while facing unprecedented dual sanctions of FTC fines and criminal charges for unfair practices, the company did not hesitate to pay out 43% of its net profit as dividends. A financial structure with a 373% debt-to-equity ratio and 208 billion KRW in warranty provisions serves as a warning that there is effectively no buffer to absorb external shocks once these legal risks materialize."