DaimlerChrysler's trucks business continues to boom in the second half, its head of commercial vehicles said on Tuesday, reiterating the division's forecast for sharply higher 2004 operating profit.

But he expressed a note of caution about higher prices for commodities such as steel, Reuters reported.

"We are delighted with the way business has developed and are on track for achieving a substantial increase in operating profit in 2004 compared to last year," Eckhard Cordes said in a trade fair statement cited by the news agency.

He reportedly said market conditions remained good, with burgeoning demand for trucks in Europe and particularly strong business in the NAFTA region and the Middle East helping to boost results at the world's biggest maker of trucks and buses.

"We are seeing more and more signs of this trend continuing into the second half of this year," he said, according to Reuters, although the van market was showing only minimal growth and the bus and coach market was set to stagnate. Cordes also said Daimler was optimistic about 2005 as well, although he sounded a cautionary note about higher prices for commodities such as steel.

Truck makers were already feeling the impact of higher steel prices, which were likely to remain firm given brisk demand from China's fast-growing economy and elsewhere.

"I don't think this will choke off the rebound in the commercial vehicle sector, but we have to keep an eye on this," Cordes reportedly told a news conference.

"The wording (of the outlook) is a bit more optimistic than before, but this should already be reflected to a large part in the estimates, so this is not a great surprise," Lars Ziehn, auto sector analyst at WestLB, told Reuters.

Cordes reportedly said the commercial vehicles division would add more than 4,000 jobs this year - 3,000 of them in NAFTA - to bring the total to some 110,000.

Reuters noted that DaimlerChrysler earlier this month forecast solid sales growth at its commercial vehicles division this year. It forecast 2004 revenue of €33 billion ($US40 billion) at the division, helped by the integration of Japanese unit Mitsubishi Fuso, up from €28.5 billion in 2003.

Cordes, who is slated to take over from Juergen Hubbert as head of Mercedes Car Group on October 1, has said he would not comment on his new job until 100 days after starting, Reuters added.