Daimler, the parent of the luxury car company Mercedes-Benz, reported a 45 per cent profits increase in the fourth quarter.
Mercedes-Benz parent drives up profits
Daimler profits surged 45 per cent in the fourth quarter, helped by the revamped Mercedes-Benz S-Class sedan, one of the car maker’s biggest selling brands in the UAE.
The Stuttgart-based car maker yesterday reported adjusted earnings before interest and tax of €2.53 billion (Dh12.56bn), beating expectations.
The results reflect a major turnaround for the group after it issued a profit warning last April.
Mercedes-Benz hit record sales in the UAE last year with almost 6,000 cars sold in Dubai and the Northern Emirates – up 20 per cent on a year earlier. The dealer Gargash Enterprises expects another record this year. Mercedes-Benz sales in Abu Dhabi also recorded double-digit growth led by the S-Class, which experienced a 15 per cent increase.
“Daimler is in a very good condition,” said the company’s chief executive, Dieter Zetsche. “Our prospects for the future also make us confident that we will achieve our ambitious goals in all divisions.”
Mr Zetsche has vowed to return the car maker to the top spot in the luxury car segment by the end of the decade after losing its place to its rival, BMW.
Daimler is halfway through a two-year plan to cut spending by €2bn at the car making division. The Fit for Leadership programme includes lowering material costs, tightening production efficiency and using funds more flexibly. Mercedes-Benz enacted €800 million of the planned cost reductions last year.
“Daimler is improving in the areas where they previously lagged behind, and their strategy seems to work,” said Daniel Schwarz, a Frankfurt-based analyst with Commerzbank. “It’s not all down to the new models. Daimler is also making progress at reducing costs.”
Daimler said that on a full-year basis, the return on sales at the Mercedes-Benz cars division had dipped to 6.5 per cent from 7.2 per cent, but that improved profitability from a heavy investment programme in new products would filter through this year.
The company, also the world’s biggest lorry maker, expanded car sales faster than Volkswagen’s Audi in the final months of last year and for the first time since 2010 posted a higher delivery growth rate last year than BMW. January deliveries for Mercedes-Benz climbed 15 per cent.
* With agencies