Global automobile markets will not pass through the worst of the recession until the second half of 2009 at the earliest, Daimler chairman Dieter Zetsche told the annual general meeting in Berlin today, adding that the automaker was preparing for a distinct decline in business volumes this year with revenue “likely to be significantly lower than in the prior year in all automotive divisions and further substantial burdens on group earnings anticipated”.
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He said a more detailed statement on earnings would not be possible “until the development of the world economy and the relevant markets can be better assessed”. The group would publish its Q1 2009 results on 28 April ”whereby a significant loss is anticipated for the first quarter”.
Zetsche said Daimler expected a gradual improvement in the earnings situation as the year progressed, with contributions from the full availability of the new Mercedes-Benz E-class and the “crisis management” that has been initiated.
Daimler posted a 2008 operating profit of EUR2.7bn euro and net profit of EUR1.4bn .
“We intend to remain a strong company also in times of weak markets,” states Zetsche said.
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By GlobalDataDaimler would manage the crisis with rigid cost management, reduced labour costs and reduced working capital, as well as by maintaining financial flexibility and executing further efficiency programme in all divisions.
In the first quarter of 2009, Daimler “drastically intensified” the actions introduced last autumn to reduce the costs of business travel, consultancy fees and general overheads. Wage rises have been limited to the portion specified by the collective bargaining agreement, while executives have had to accept substantial salary reductions of nearly 30%.
The company announced additional savings measures last week. Negotiations with employee representatives are to be concluded by the end of April.
Zetsche added: “Although the crisis is forcing us to cut costs wherever we can, we will not jeopardise our future by reducing essential investment.”
By 2012, Daimler intends to reduce the average CO2 emissions of its new car fleet in Europe to less than 140g/km, thus fulfilling the EU targets. 24 Mercedes models already achieve this. At least 50% of all Daimler cars sold in Germany in 2009 will benefit from the country’s new system of vehicle taxation.
Shareholders were told that the 22 Chrysler sales companies outside the NAFTA region that continued to be temporarily managed by Daimler were successfully transferred to Chrysler Holding on 31 March 31 as part of the agreement concluded with Cerberus in 2007.
