Struggling in China, Daimler sees flat 2013 profit
By Christiaan Hetzner
STUTTGART, Germany (Reuters) - German automaker Daimler (DAIGn.DE: Quote) said it expected flat earnings this year as a persistently weak market and an ageing model line-up sap demand for its luxury cars and trucks until the second half.
Premium brands like Daimler's Mercedes or Volkswagen's (VOWG_p.DE: Quote) Audi have held up better than mass-market competitors in Europe's car market meltdown, such as loss-making Peugeot (PEUP.PA: Quote).
But some investors have begun to lose patience with a Daimler management team that has failed repeatedly to deliver the same profitability as peers BMW (BMWG.DE: Quote) and Audi.
Daimler executives admit profits would have been better were it not for the underperformance of Mercedes in China, a vital growth market where its two local rivals have been running circles around it.
Daimler forecast 2013 earnings before interest and tax (EBIT) from its ongoing business at around last year's 8.1 billion euros, down 10 percent from 2011 and in line with a consensus estimate from analysts.
"For market and model-cycle reasons, the first quarter is likely to be the weakest of the year," said its finance chief Bodo Uebber.
Uebber said Daimler based the forecast in part on expectations that the euro will trade between $1.30-$1.35. The European currency was bid at $1.357 on Thursday.
An upcoming revamp of its flagship Mercedes S-Class saloon, due mid-year, and roughly 600 million euros in Mercedes cost savings would boost second-half profit, the company said. Continued...