Daimler CEO sees "challenging" times for Mercedes

Thu Sep 27, 2012 4:37am EDT
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FRANKFURT (Reuters) - Daimler AG's Chief Executive Dieter Zetsche on Thursday called into doubt next year's profit target at Mercedes, pointing to a tougher environment for vehicle sales.

Speaking at the Paris Auto Show, Zetsche said Mercedes' aim for a 2013 earnings before interest and tax margin of 10 percent had always been conditional on the business environment, which he said was becoming more challenging.

"We've always explicitly said that it's a qualified target. What lies ahead of us is more challenging," he said.

Daimler had last week warned that 2012 profit would slip at Mercedes-Benz cars, its flagship division, due to a deteriorating market in Europe and China.

Zetsche said he would be able to provide more detail later this year after the company decides on the scale of a cost-cutting plan at the Mercedes unit, adding that management was in very early discussions with worker representatives.

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

Zetsche declined to give a view on the future of aerospace company EADS, in which Daimler holds a 15 percent direct stake and which is in talks about a merger with Britain's BAE Systems.

"We made it very clear that we want to focus on our automotive business. It is not our key responsibility to determine the future strategy of the aerospace industry."

(Reporting by Christiaan Hetzner, writing by Jonathan Gould)