Preliminary second quarter 2007 data from DaimlerChrysler showed an improvement in Mercedes car group earnings before interest and tax (EBIT) of 74% from $US933m last year to $1,628m.

The truck group boosted EBIT to $813m, from $791m, while the 2007 van, bus and other EBIT of $347m compared unfavourably to the Q2 2006 result of $1,516m due to positive special items, DC said.

Mercedes' car group has set a new target of a return on sales of 10% by 2010 at the latest.

Results for the DaimlerChrysler group, financial services division and the discontinued activities of the Chrysler group and Chrysler Financial (NAFTA) will be published on 29 August.

Mercedes car group sold 320,200 vehicles in the second quarter versus 325,500 last year and revenues of $17bn were flat.

Its EBIT increase was due to better sales mix and quality and efficiency improvements achieved by the automaker's CORE restructuring programme, though earnings were hit by exchange-rate effects in the second quarter, DC said.

Second-quarter sales of 285,600 Mercedes-Benz brand passenger cars were 2% less than last year.

Smart unit sales fell to 31,700 from 34,500, as expected, due to the axing of the Forfour model, of which 12,000 units were sold in Q2 2006.

Sales of the new Fortwo, launched at the end of March, have been developing "very positively", DC said, adding that Q2 sales increased 44% year on year.

DC noted that comprehensive measures taken recently to achieve further quality improvements saw the number of faults per vehicle delivered reduced by 25%, which helped lower warranty expenses.

The truck group sold 112,100 vehicles in the second quarter of this year which was, as expected, lower than last year's Q2 sales of 132,400. Q2 06 sales included an extra 6,200 Sprinter vans produced by Trucks NAFTA and this year's fall was due primarily to a drop in demand caused by stricter emission regulations in the United States, Canada and Japan.

Revenues of $9.3bn were 19% lower year on year.

The truck group posted second-quarter EBIT of $813m vs $791m. Earnings were boosted by increased unit sales in Europe and Latin America, improved product positioning and ongoing efficiency enhancements. Negative effects included lower sales in the NAFTA region and Japan. The sale of properties in Japan led to a capital gain of $92m in the second quarter.

Truck sales in Europe and Latin America increased 8% to 39,700 units. Trucks NAFTA sold 24,500 Freightliner, Sterling, Western Star and Thomas Built Buses models (vs 46,800 last year).

DC said the substantial decrease in unit sales was mainly due to the EPA07 emission regulations, which came into force this year and led to purchases being brought forward to 2006.

Trucks Asia sold 47,800 Mitsubishi Fuso brand vehicles versus 49,800.

Second-quarter EBIT of the van, bus, other segments was $347m (Q2 2006: $1,516m) but, in Q2 2006, there was a capital gain of $1,101m from EADS share dealings.

Mercedes-Benz vans unit sales 13%. Due to high demand for the new Sprinter, production capacities in the Dusseldorf and Ludwigs felde plants are fully utilised, the automaker noted.

For the second half, DaimlerChrysler expects global market expansion - for both passenger cars and commercial vehicles - to slow compared to the same period in 2006.

In full-year 2007, demand for passenger cars in the markets of North America, Western Europe and Japan is expected to fall slightly but "significant increases in demand for both passenger cars and commercial vehicles are anticipated for the emerging markets of Asia and Latin America, as well as for eastern Europe."

The company said demand for trucks in North America is expected to fall sharply while Japanese volume should also be significantly lower.

"In view of the positive economic conditions in western Europe, DaimlerChrysler anticipates slightly positive market developments in this region," it said.

The Mercedes car group expects 2007 unit sales to at least equal the record set last year.

For full-year 2007, the car group expects a return on sales of "significantly more than 7%" and, despite increased expenditure for more efficient and alternative drive systems, sees the return on sales increasing to 10% by 2010.