Strong Mercedes-Benz sales in the fourth quarter of 2009 are just the beginning of an earnings recovery for the company, according to an analyst who spoke to just-auto today.

Mercedes-Benz Cars (the unit includes Smart) reported a 9.6% year-on-year increase in December retail sales to 107,600 units. Fourth quarter sales were up 8.6% on last year.

“The sales improvement at the Mercedes-Benz brand throughout last year was attributable to a rapidly improving model momentum, reflecting the roll-out of the new E-Class family,” said Creative Global Investments analyst Sabine Blümel.

She said that the Mercedes-Benz Cars division of Daimler is set to post higher profit in the fourth quarter, a trend that will continue in  2010.

“We expect an EBIT of EUR 389m for Q4 – an estimate that implies a 10% increase over the third quarter's number. There's positive momentum from cost-cuts, a better model-mix, better pricing and higher production,” Blümel maintains.

Daimler management expects a moderate increase in unit sales in 2010. Blümel forecasts that 2010 will see divisional sales growth of 7.5% and an EBIT of EUR 1.3bn with the EBIT rising to EUR2.1bn in 2011 on sales growth of 5%.

“The drivers are an expected recovery in demand in the premium car segment in Europe and North America and further cost cuts, although the model momentum is expected to decelerate from the second half of this year onwards,” she says.

Daimler should also be helped by some earnings recovery at Daimler Trucks and Mercedes-Benz Vans in 2010, assisted by a recovery in the US truck market, followed by improvements in European sales.

“There should also be large cost benefits from comprehensive restructuring at the truck operations in North America and Asia,” Blümel says.

Mercedes-Benz will offer the new E-Class convertible from early 2010, a variant which will round out the E-Class model family.

Mercedes says the new E-Class and new-generation S-Class have contributed particularly to strong sales lately. The firm also points to rapidly rising sales in China  where it claims to have been the fastest-growing premium brand in the country in 2009.

In 2009 Mercedes car deliveries in China increased by 65% to 70,100 passenger vehicles. China is now the world’s largest market for the S-Class model.

Mercedes-Benz delivered a total of 190,600 passenger vehicles in the US in 2009, down 15% on 2008.

Dave Leggett

See also: GERMANY: Mercedes sets China sales record