Daimler casts doubt over Mercedes 2013 target

Thu Sep 27, 2012 8:23am EDT
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By Christiaan Hetzner

PARIS (Reuters) - Daimler AG (DAIGn.DE: Quote) Chief Executive Dieter Zetsche called into doubt the 2013 profit target for the German car group's core Mercedes-Benz business on Thursday, pointing to a tougher environment for vehicle sales.

Speaking at the Paris auto show, Zetsche said Mercedes' 10 percent EBIT margin (earnings before interest and tax) goal had always been conditional on the business environment, which he said was becoming more challenging.

"As long as we don't change it, what we have said is relevant," the Daimler CEO said. "But ... we always said (the guidance) was explicitly within the framework of a given environment."

This included factors such as gross domestic product, market developments and exchange rates.

"So it was always qualified in that sense. These parameters in recent times definitely have not improved and therefore what lies ahead of us is certainly becoming more challenging," he said.

Zetsche added that next year's results would also depend on the extent of an efficiency and streamlining program, dubbed "Fit for Leadership", whose cost cuts have yet to be determined.

"We are not excluding any part of the company in the scrutiny for efficiencies," he said.

Zetsche said he would be able to provide more detail about the 2013 target for Mercedes later this year after the company decides on the scale of cost cutting, adding that management was in very early discussions with worker representatives.   Continued...