Daimler has reported weaker than expected third quarter operating profit as the economic downturn hit sales of its luxury cars in western Europe.
Earnings before interest and tax (EBIT) dropped 19% to EUR1.97bn (US$2.7bn) in the three months to the end of September as sales growth shrunk in Europe with Germany the only major market in the region to expand in September.
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Even the booming Chinese market has slowed and Daimler said it sees little sign of any significant growth in western Europe. Daimler’s bottom line was also hit by a total EUR133m impairment of its investments in Renault and Russia’s Kamaz after both companies’ share prices fell sharply.
Mercedes-Benz sold 2% fewer vehicles in western Europe in the third quarter, with sales in Germany stagnating.
Daimler still sees full year EBIT rising “significantly” from 2010 with revenues of over EUR100bn (US$1.3bn) but warned the economic environment was becoming more gloomy.
Chief financial officer Bodo Uebber said he saw the crisis in the euro zone continuing into next year and expected it would take weeks until there was clarity on any plan to stabilise the region.
He added the company was sticking to its 2013 targets for cars and trucks and achieving an EBIT margin of 8% in its trucks business and 10% at Mercedes-Benz.
Daimler Trucks, which generates more than a quarter of group revenues, was a bright spot in the quarter, with an EBIT of EUR555m.
The Q3 figures come during a turbulent time at Daimler which has just fired the head of Mercedes-Benz USA after reaching record monthly sales figures of almost 24,000 vehicles there in September.
