German luxury carmaker Daimler is expected to report an operating margin of 8.3% in 2011, according to the average estimate of 23 analysts surveyed by Bloomberg News. If the average estimate comes true, the 8.3% operating margin would be Daimler’s best since it parted ways with Chrysler five years ago.
The estimate puts Daimler, which owns Mercedes-Benz, at third place among German luxury carmakers, behind Audi and BMW. The same analyst survey says Audi and BMW are expected to post operating margins of more than 10%. General Motors is estimated to post a 5% operating margin in 2011, while Italian carmaker Fiat, which now owns Chrysler, is expected by analysts to record a 4% operating margin.
The larger operating profit for German carmakers is attributed to the fact that competition is stiff among the world’s largest luxury carmakers. According to the 23 analysts surveyed by Bloomberg News, the same trend is expected in 2011.
"The gap in Europe will widen to the advantage of the Germans" this year, said Stefan Bauknecht, a fund manager with Deutsche Bank AG's WS. Bauknecht noted that "Fiat and the French carmakers have the wrong products and the wrong market exposure,” adding that they would be under pressure from Asian carmakers like Toyota and Hyundai. Daimler, Audi and BMW all sold a record number of units in 2011, thanks to their Chinese expansion and the rebound in U.S. spending.
BMW topped the luxury car global market in 2011 with 1.38 million units sold, followed by Audi with 1.3 million, and Daimler’s Mercedes-Benz with 1.26 million. German carmakers are expected to take a hit from the current European debt crisis, but it is not enough to stunt their growth. BMW, Volkswagen and Daimler are expected to grow faster than the global market this year, with support from updated models like the BMW 3-series, Audi A3 and Mercedes SL.