A growing Chinese appetite for Mercedes-Benz has put Daimler, the world's second-largest maker of luxury cars back in black.
Daimler drives back to good health with €4.7bn profit
Daimler, the world's second-largest maker of luxury cars, is back in the black thanks in part to a growing appetite for its machines in Asia.
The German car maker, which is part owned by Abu Dhabi's Aabar Investments, yesterday announced a net profit of €4.7 billion (Dh23.26bn) for last year, compared with a net loss of €2.6bn for 2009.
But the preliminary results fell short of analysts' expectations.
Mercedes-Benz Cars sold nearly 1.3 million vehicles, 17 per cent more than the year before and exceeding its numbers from 2008.
"We increased our unit sales in all regions with particularly dynamic growth in the Asian markets," said Bodo Uebber, the chief financial officer of Daimler. "In China alone our unit sales more than doubled to 160,000 vehicles."
The group's overall revenue, including its commercial vehicles, vans and buses divisions, totalled €97.8bn, up from €78.9bn the year before.
This was on the back of a global recovery in the motor market, which grew by an estimated 12 per cent, Mr Uebber said.
"The Asian emerging markets once again recorded very strong growth in demand for cars, especially China and India, with growth rates of 40 and 30 per cent respectively," he said.
Daimler plans to issue an annual dividend of €1.85 a share, which it declined to do for 2009. This is good news for Aabar, a fund owned by the Abu Dhabi Government's International Petroleum Investment Company, which owns a 9 per cent stake in Daimler.
"Daimler made a spectacular comeback in 2010," said the Daimler chief executive Dr Dieter Zetsche. "We showed what we're made of and we'll keep our foot on the gas pedal in 2011."
Daimler expects to sell more vehicles this year but did not give a specific forecast. However, the car maker expects the global passenger vehicle market to grow by between 5 and 7 per cent this year.
"The markets of US, China and India will be the main drivers of growth," said Mr Uebber.
Daimler is increasing its investments in research and development of new technologies, such as engines that are more fuel efficient and have less carbon emissions.
Daimler is also focusing its investment on emerging markets, said Andreas Renschler, a member of the Daimler board.
"If I look at India and China, we are talking about billions in terms of investment in next two years," Mr Renschler said.
While the car maker's outlook is brighter, Daimler also expects to battle inflationary forces in the coming year.
"The global economic revival is likely to lead to rising prices for oil and other raw materials important to Daimler, and the next wage agreements will probably involve higher rises than we have had in recent years," Mr Uebber said.
The recent rally in commodity prices is increasing Daimler's cost of production for this year as well, he added.
"We will have higher financial implications worth 700 million coming from commodities, including plastic, steel, rubber and precious metals," said Mr Uebber.