Record sales of Mercedes-Benz cars and commercial vehicles in the third quarter were not enough to prevent a slip of 16.8% to net profit (third quarter EBIT was also down by 14% on last year). The company’s bottom line was dented by diesel engine emissions recall costs.

Daimler has booked a charge of EUR223 million this year for recalls of some three million diesel engine cars that require fixes to improve their NOx emissions performance.

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Daimler sold 824,100 cars and commercial vehicles in the third quarter (+9%), setting a new record for total unit sales. All automotive divisions contributed to the company’s best-ever quarterly unit sales. Mercedes-Benz Cars posted its 55th consecutive record month (Q3 2017: 597,300 units, +6%), and unit sales by Daimler Trucks were up 30% to 126,600 units. Group revenue amounted to EUR40.8 billion in the third quarter, und which is 6% above the prior-year level. Adjusted for exchange-rate effects, revenue rose by 8%.

The Daimler Group’s third-quarter EBIT of EUR3,458 million in 2017 was significantly below the prior-year figure of EUR4,037 million. Net profit amounted to EUR2,268 million (Q3 2016: EUR2,726 million).

Daimler said the EBIT of the Mercedes-Benz Cars division was significantly below the prior-year figure, due “in particular to expenses in connection with warranty measures and expenses for voluntary service activities”. The Mercedes-Benz Vans and Daimler Buses divisions also posted significantly lower EBIT than in the third quarter of last year.

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Daimler Trucks significantly surpassed its earnings of the prior-year period, due in particular to growing unit sales in the NAFTA region and Asia. Daimler Financial Services also achieved a significant increase in third-quarter EBIT.

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“Daimler is operating successfully and leads the premium segment with Mercedes-Benz. Now is therefore the right time to examine – from a position of strength – whether we can position ourselves even better to shape the automotive era definitively and successfully from the top: with cars, vans, trucks, buses, financial services and mobility services. Because we intend to be at the top over the long term,” said Daimler chief Dieter Zetsche.

Daimler recently announced a restructuring for its divisions that could make divestments – to raise capital for expensive R&D – easier in the future.

Daimler stuck with its guidance for a significant increase in group EBIT this year.

See also: Daimler takes steps to reshape company