By on October 27, 2009

Look out below. (courtesy

It’s your classic case of schlechte/gute Nachrichten. Post-Chrysler Daimler is predicting positive earnings in the fourth financial quarter—before interest and tax. After that, after the federal money’s gone, things will go from worse to worserer. “Global demand for cars should fall this year by only around 10 percent thanks to state incentives . . . Negative effects on demand can be expected when the state support programs are phased out in the following years, particularly in the volume segments of more mature markets.” Reuters’ numbers tell the tale. Sales at Daimler’s high margin division, Mercedes-Benz Cars, fell by 15.7 percent in the first three quarters of the year to 825,600 vehicles. Remember: that’s compared with last year, which was no sales bonanza, Hoss. Without a buoyant Chinese market uh, buoying Mercedes, the numbers would be even bleakerer. Meanwhile, Automotive News reports that Honda has revised and tripled its profit forecast—and sounded the same alarm. “Honda, the world’s seventh-biggest carmaker, attributed the bulk of the revision to state-backed measures to stimulate sales and warned a real recovery in demand was still some time off.”

Get the latest TTAC e-Newsletter!

18 Comments on “Daimler, Honda: Recovery, What Recovery?...”

  • avatar

    I don’t know about the others, but Daimler posted a tiny €56 million profit in the third quarter (after taxes and all other deductions). Of course they lost €2.3 billion YTD. So 2009 will be a very bad year for Daimler since there’s no way to get anywhere close to even. But next year doesn’t look so bleak. Slowly the world economies seem to get back on track, so Daimler should be able to at least make a tiny profit in 2010.

  • avatar

    LOL – once the Federal Money is gone….

    Be prepared for 2 things:
    #1 the worst job market this country has ever seen
    #2 a credit card/debt crash – which probably won’t be as bad as the subprime crash.

    There is lots and lots of debt on the backs of America’s 10% unemployed and unlike WW2 we don’t have jobs to produce products and are losing service sector jobs thanks to internet technology- those jobs have all been transferred by the corporations to India and China.

    I don’t think I’d be wrong to say that Mercedes Benz, BMW, Toyota, and VW will see sales drops due to the inability of people to purchase cars on their debt loads.

    I can’t tell you how liberating it feels to have paid off ALL of my credit cards and debts – I feel like a weight has been lifted off and I worry for those who can’t do the same. I worry about what the government is going to do to deal with the banks who end up with millions of Credit Card defaults / student loan defaults.

    I think TTAC is going to be doing more “bailout editions”.

  • avatar

    How did that Chevy Caprice fit so well in that hole?

    Benz needs to build functional, reliable, forward looking designs, heavy on spartan luxury with a sporting bent.

  • avatar

    Newsflash: Honda made half a billion dollars last quarter. Their stock is up 8% today.

    They figured out how to make money in a down market. Chrysler never figured out how to reliably make money during good times.

  • avatar

    SherbornSean :
    October 27th, 2009 at 11:19 am

    Newsflash: Honda made half a billion dollars last quarter. Their stock is up 8% today.

    They figured out how to make money in a down market. Chrysler never figured out how to reliably make money during good times.

    4.7% actually. But as a share holder, I won’t complain.

    Honda is doing the right things. Cut RWD platform. Cut V8 program. Not going after more sales at the cost of margin. When they complete the currently objective of reducing size and reducing price, it will only be better.

  • avatar

    Besides the Recession news – Daimler Benz may need to hedge their current and future North American sales to factor in the decline in the Dollar versus the Euro.

    With Honda its the appreciation of the Yen against the Dollar.

  • avatar

    jacksonbart :

    Spartan luxury? I’ve honestly never heard those two words in a sentence ever in my life.

    “This is madness!”


  • avatar

    Don’t worry, soon Fritz will reassure us that Marketing Bob says that their estimates are…say it with me fellas…”a crock of…”

    Funny how well run companies sound more realist than some others. Wonder why that is.


  • avatar

    Spartan luxury is where you have leather seats but they’re real hard….

  • avatar

    I’ve had three Honda Civics over the years with a couple of Jeeps thrown in, and I’ve always figured that the Big 2.8 wouldn’t survive until they made cars that actually competed with the Civic. When I bought my last one, I did shop the several Detroit cars and I just couldn’t compare them to the quality, value and resale of a Honda. I’m not surprised that their still making a buck.

    And as far as a recovery, even with the wife and I still employed, the last thing I’d do right now is buy any new vehicle. Forget it with all of Washington’s massive debt spending (and their plans for more). I’m hunkering down…

  • avatar

    Daimler and Honda may suffer some, but if the downturn prediction comes true, it’s GM and Chrysler who may meet their demise sooner, rather than later. And maybe even Ford.

  • avatar

    Airhen :
    …I’m hunkering down…

    Yup, me too. No new cars for me for the indefinite future.

    Even when I buy used, I won’t be buying anything from any government-owned, government-run car company, not even if it was built before they became Government Motors.

  • avatar

    SSean, check your facts. Chrysler was the most profitable of the major manufacturers in the late 90’s.

  • avatar

    That pic looks like a central Florida sinkhole. Sinkholes can be large or small. Sometimes they cause a surface collapse; could be pothole-sized, or could be a cavernous one that just keeps sinking and sinking and sinking for days or even weeks.

    They often happen during the dry season as the sandy soil falls into the rocky and porous substrate. We have had sinkholes open up under parking lots, expressways, offramps, and houses. Yeah, yikes!

    About 10 years ago (memory is fuzzy on the date), a sinkhole once opened in the middle of a neighborhood lake/pond. Over the course of the next several days, it drained the lake! Worst of all, it left all the fish flopping around on the dry lake bed. That’s when the birds came. Days/weeks later, the rotting fish carcassas and the bird poop posed a serious health issue to the residents. Last I heard, the neighborhood was trying to raise almost $90,000 to have the sinkhole filled in so that the pond would refill naturally with the summer rains. In all these years, I haven’t seen a media followup, so I don’t know what ultimately happened.

    The saddest one I heard of was when one opened up underneath a horse barn. I think one horse was trapped, and had to be rescued with a crane. If I recall correctly, that horse eventually had to be put down. Heartbreaking.

    Some sinkholes can be filled in with a slurry of sand and concrete, but when they open underneath a building, that building is usually condemned.

  • avatar

    spartan Luxury is when you’re car has leather seats made from leather of animals you had to hunt down and kill yourself – then you have to tan it.

  • avatar

    vexner :
    October 27th, 2009 at 2:48 pm

    SSean, check your facts. Chrysler was the most profitable of the major manufacturers in the late 90’s.

    No. That’s “creative accounting.”

    From an operation point of view, they do have a profit. But they ignored the ever-increasing fixed liabilities to the UAW. That increased burden should have been counted as loss, because in the end it is what made them fail.

  • avatar

    Intersting JLR sales are up by about 30% and they really have’nt been suckling much from the scrappage teat. Maybe Daimler’s cars just aren’t that popular.

  • avatar

    Honda is suffering from exchange rates – they gotta be. The USD-JPY chart is ugly. They can revive their sports car development programs as soon as they get some traction in their key markets. I hate it just as much, or more than anything, because I live for the Integra, Prelude, NSX, roadster, etc although the Accords and Civics are good products, and as it was pointed out by Satan’s assistant in South Park … “hey, Acuras are pretty nice!”

    Mercedes is under assault by Audi and BMW pretty much everywhere. It’s not surprising. I know a lot of people who find Benz’s current designs to be nice, but they also have no intention of buying or leasing a C-class, test drives or no.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • EBFlex: “ That was my point. It was far from insane, which is what you called me…not that I care what you think of...
  • theflyersfan: I was up in Chicago for the AEW show over the weekend. 93 octane was $7.25-$7.50/gal in multiple...
  • BOJO: It seems to me Honda has a plan for their vehicle owners to upgrade to a new car. Rust is part of that plan. In...
  • DenverMike: When was the last time it did? 1963? The danger of death is about zero, more of an annoyance, common to...
  • FreedMike: @Art: Supply issues and inflation contributed, but consumers were clearly the ones who “jacked...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Jo Borras
  • Mark Baruth
  • Ronnie Schreiber