GENEVA SHOW (updated 14:10GMT): Mercedes chief confident of sales boost and steady operating profit despite slow 2004 start

DaimlerChrysler‘s flagship Mercedes unit still expects to sell more of its cars this year despite a weak start, and at least match last year’s operating profit, the unit’s head said at the Geneva motor show on Tuesday.

“We are slightly behind last year (in February), which is what we expected all the time,” Mercedes car division head Juergen Hubbert told Reuters.

“The first half would be below last year and the second half would be above last year so that at the end we expect to be slightly better than 2003,” Hubbert reportedly said.

According to the news agency, Hubbert said the slow start was due in large part to model changeovers for three key product programmes: the C-class, the A-class mini-car and the M-class sport utility vehicle.

Reuters also reported that Hubbert said at Geneva that he expects operating profits this year to at least match last year’s €3.1 billion ($US3.87 billion) level – this was based on an expectation that the dollar would rise.

“There are no negative effects through currency fluctuations that would not be contained in the planning,” he reportedly said.

Hubbert said an expansion of capacity at its US plant in Tuscaloosa to 150,000 vehicles from 85,000 until now would enable Mercedes to better compensate for a weak dollar, Reuters reported, noting that, late on Monday, Chrysler boss Dieter Zetsche said in a television interview that the US car market had been weaker than most in the industry had expected last month.

That contrasts with comments from BMW, which said on Tuesday that it sold four percent more cars in February worldwide than in the same month a year earlier, the report added.

Reuters said that last year the US became the biggest market for BMW, which is already reaping the rewards of a model offensive.

In a move to quiet speculation that DaimlerChrysler was about to replace the head of its Japanese affiliate, Mitsubishi Motors, Hubbert, a DaimlerChrysler management board member, reportedly said Rolf Eckrodt would remain Mitsubishi’s top executive, Reuters noted.

“Mr Eckrodt is the president of Mitsubishi Motors and he will stay the president of Mitsubishi Motors,” Hubbert reportedly said.

Last week, a source at Mitsubishi Motors told Reuters that a team from DaimlerChrysler headed by Andreas Renschler, chief of the company’s Smart Cars unit, would travel to Japan to help restructure Mitsubishi Motors. A German publication, Manager Magazin, prevously reported that Renschler would take over from Eckrodt as head of the struggling Japanese carmaker.