x Abu Dhabi, UAEWednesday 24 January 2018

German car maker Daimler says profit to hit speed bump this year

Daimler forecast unchanged 2013 profit as spending for new models and a revamp of the automaker's operations eat into earnings.

Daimler, the world's third-largest maker of luxury vehicles, forecast unchanged profit thsi year as spending for new models and a revamp of the automaker's operations eat into earnings.

Earnings before interest and taxes in 2012 from ongoing business fell 10 per cent to €8.1 billion, the automaker said. Profit on this basis in 2013 will be on the same level as last year, Daimler added.

"We did not reach our own targets for earnings and profitability" in 2012, the Daimler chief executive Dieter Zetsche said in the statement. "To ensure that our future growth is even more profitable, we have implemented detailed measures in all divisions."

Mr Zetsche announced an efficiency programme in September dubbed "Fit for Leadership," with a goal to cut €2bn from spending at Mercedes by the end of 2014. The Daimler Trucks unit, the world's biggest maker of heavy vehicles, plans to cut 2,100 jobs, including 1,300 factory positions in North America. Daimler is spending €10.8bn in the next two year on research and development.

Mr Zetsche, whose contract may be extended for five years this month, has vowed by the end of the decade to retake the global luxury-car sales lead that Mercedes lost to Bayerische Motoren Werke in 2005. Mercedes is rolling out a reworked version of its upscale E-Class sedan this year, adding the four-door CLA coupe to its compact-car line-up and selling the next generation of its high-end S-Class in the second half.

Daimler had forecast last year's Ebit from ongoing business "in the magnitude" of 2011's level as recently as July before revising down the target to about €8bn in October.


* Bloomberg News