ANALYSIS: Why Daimler has returned to profitability
Daimler's return to profitability in the third quarter is thanks to crisis management, a turn in the inventory cycle and the new E-Class, according to an analyst who spoke to just-auto.
"Cost savings and a turn in the inventory cycle, together with a better model mix at Mercedes-Benz Cars rather than a recovery in demand were behind the sharply improved performance in the third quarter," said Sabine Blümel, an analyst with Creative Global Investments (LLC).
A much-improved performance at Mercedes-Benz Cars was due to cost-cuts, a better model-mix, better pricing and higher production, she said.
A new E-Class, of which the saloon and coupé versions were available during the quarter, and a facelifted S-Class (launched in June 2009), sharply improved the model mix; the E-and S-Class accounted for a combined 27% of divisional retail sales in 3Q09, vs. 22% in 2Q09.
Better pricing was the result of a younger model portfolio and the absence of an inventory overhang, Blümel maintains.
Daimler's management is cautiously optimistic that earnings will stay positive in the fourth quarter, although the trucks division is set for deeper losses from ongoing business and restructuring charges of up to EUR100m. In addition, management warns that there could be additional charges for the group from troubled dealers and suppliers.