DaimlerChrysler’s commercial vehicles division will continue its positive earnings momentum in the second half of the year, a company executive said on Thursday, according to Dow Jones Newswires.
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The “positive trend” in operating profit as seen in the second quarter “will continue in the third quarter,” management board member Eckhard Cordes, who oversees the company’s commercial vehicles operations, told the news agency, adding: “I am convinced that the fourth quarter will show that it’s sustainable.”
Dow Jones noted that DaimlerChrysler’s commercial vehicles division, which makes trucks and buses, posted an operating profit of €211 million in the second quarter, up from a €7 million loss a year earlier.
DaimlerChrysler reports third-quarter earnings on Tuesday and analysts surveyed by Dow Jones Newswires expect the division to show an operating profit of €133 million.
Dow Jones noted that DaimlerChrysler is the world’s largest truck maker having built up a global truck business over the past few years by way of acquisitions and partnerships.
The news agency said the company is now reaping rewards from restructuring efforts aimed at integrating its far-flung truck operations, which include Mercedes-Benz trucks, Freightliner in the US, and a 43% stake in Japan’s Mitsubishi Fuso.
Dow JOnes said the company is also now trying to take advantage of its size with moves such as developing a family of engines that can be used in all of its heavy trucks. It says these engines will be the most widely produced heavy-duty motor line in the world, the report added, noting that the truck operations account for about 20% of DaimlerChrysler’s total revenues.
Dow Jones said the turnaround in earnings comes despite a slump in demand for new trucks and buses while Cordes said he doesn’t expect a significant improvement in the market next year.
“The message is no, or very limited, growth in 2004 in the context of depressed markets of 2003. That’s the scenario,” he reportedly said at the International Road Transport Show in Amsterdam.
Dow Jones said Cordes expects the Western European truck market to remain flat next year, with some growth potential in the cargo van segment, while, in the North American region, he foresees potential for a small increase in heavy-duty trucks in 2004.
