Daimler Profits Drop 32 Percent

Edward Niedermeyer
by Edward Niedermeyer
daimler profits drop 32 percent

Marketwatch reports that Daimler's profits dropped 32 percent in the first quarter of this year, tumbling to $1.3b. Revenue actually jumped about four percent in the same period, although pre-tax earnings dropped by an even more precipitous 40 percent. Daimler blames the red ink on its remaining 20 percent stake in struggling Chrysler, which created a 340m Euro drag on operating profits. [Chrysler's reply coming.] Another hit: Daimler's sale of its minority stake in EADS, parent of Airbus, in the first quarter of last year. Daimler's core business is operating on a fairly solid financial basis; Mercedes sales increased by 17 percent, operating profit by 45 percent. Only Daimler's truck business remains shaky, due to the "tense economic situation in the United States," a European oversupply of commercial trucks and new emissions standards. Still, Daimler is sticking by its forecasts that profit will continue to rise throughout the year. What a difference a brand makes.

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  • William442 William442 on Apr 29, 2008

    No customer should either, considering how the dealers treat you.(And) I'm an owner.

  • Phil Phil on Apr 29, 2008

    for what it's worth, my 2007 E63 has been flawless (22k miles so far) and the service at the sacramento, ca dealership has been nothing short of excellent. i think their efforts to control quality are paying off and i will be much more likely to go with another MB rather than BMW or Audi (i had many BMWs and loved them, but they've gone in the wrong direction, IMO)

  • Windswords Windswords on Apr 29, 2008

    "So the thought occurred to me - Mercedes had their “merger” (bought up) Chrysler in order to ensure they grew sufficiently to survive. Now they’ve bled it dry and tossed it overboard (along with stakes in Hyundai and Mitsubishi), they’re now not only small-fry in a world of far stronger whales and sharks, they’re out of hosts to potentially bleed dry. No company executives in their right mind would want anything to do with Daimler after how they treated Chrysler and Mitsubishi, particularly. Time for a Daimler death watch?" A couple of points: First, at the time of the "merger" it was the prevailing wisdom that the auto industry would coalesce into about half dozen or so "mega companies". This started Mercedes looking for a "partner" (victim) because they were afraid they would be taken over by someone and also convinced Bob Eaton, head of Chrysler that he couldn't make it on his own either. They had no business taking over a mass market company like Chrylser and telling them how to run their business. Most now realize that that conventional wisdom was incorrect. You can be small and profitable if you know what you're doing, making a good product, and keeping your brand focused. Although Mercedes is a lot smaller now I still don't think it's a takeover target - I believe the German government would prevent it, because unlike the US, Germany believes it should have an independent domestic auto industry. You're right that no executive in their right mide should want anything to do with Daimler, but they recently announced a joint effort with BMW to develope engines and related technologies. I wouldn't trust them but maybe the brain trust in Bavaria knows something I don't. Finally about the Studebaker Packard deal: As far as I know Studebaker didn't come in all arrogant and takeover Packard. I thought they really tried to help each other out. But maybe I'm wrong. Can you shed some light on this?

  • Samir Syed Samir Syed on Apr 29, 2008
    Time for a Daimler death watch? I think a major reckoning is coming quite soon for the Germans - it may not seem that way, but Europe isn't immune to high fuel prices (far from it). As they've gotten bigger, heavier and more powerful, they've made even diesel-powered cars prohibitively expensive for many. If gas is $10 a gallon in the US, it will be $20 in the UK. Who's going to buy an X5 in that context? And that's before we address the declining quality of German cars and their relentless need to defile their brands by propogating model after model after model, from lowly VW all the way up to Porsche.