Local police said a police operation was under way in the city centre, without giving further details.
The incident occurred as crowds gathered in cities across regions including Germany's Rhineland for parades to mark the Carnival season.
A black SUV drove at high speed into people, travelling from the centrally located Paradeplatz square towards the city's landmark water tower, the Mannheim24 news website reported, adding that several people were severely injured.
A reporter from the DPA news agency at the scene witnessed a person being covered by a sheet among debris.
The police said the incident occurred at the Paradeplatz square in the city centre.
They asked people to avoid the city centre and warned of traffic disruptions.
The police operation followed a "dangerous" incident, a police spokesperson told the broadcaster NTV.
The spokesperson said police had no information on a suspect and could not confirm reports of casualties at this stage.
Security has been a key concern in Germany following a string of violent attacks in recent weeks, including deadly car rammings in Magdeburg in December and in Munich last month as well as a stabbing in Mannheim in May 2024.
Police were on high alert for this year's carnival parades after social media accounts connected to the Islamic State militant group called for attacks on the events in Cologne and Nuremberg.
with DPA
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