Mercedes denies it is considering withdrawing cheaper cars from US

(Reuters) -Mercedes-Benz denied a report by Bloomberg News on Tuesday which said the carmaker was considering withdrawing its cheapest models in the U.S. ahead of an added 25% tariff to be imposed on auto imports.

"This is without any merit. Mercedes-Benz continues to seek sales growth for its highly desirable vehicles," a Mercedes-Benz spokesperson said in an emailed statement in response to the report.

Bloomberg said the carmaker was considering withdrawing more entry-level models from sale as part of broader tariff contingency plans.

Industry experts have warned that the planned tariffs, to be imposed from April 3, are likely to lead to higher prices and fewer choices of models for consumers, with not enough room in the margins of more affordable cars targeted at first-time buyers to absorb the tariff cost.

Mercedes-Benz executives told analysts on an investor call on Monday that the carmaker was building up inventory levels in the U.S. at the wholesale level and at dealer lots to get ahead of tariffs, as it weighed further mitigation measures.

(Reporting by Gursimran Kaur in Bengaluru and Victoria Waldersee; Writing by Maria Martinez; Editing by Shinjini Ganguli and Jan Harvey)