Daimler wants to remind investors of the higher costs for the new Mercedes-Benz models

Article by Christian Andrei, on October 19, 2011

Daimler has been reminding investors of the greater second-half expenses for the launch of refurbished Mercedes-Benz models in an attempt to manage earnings expectations, an insider who is familiar with the situation had disclosed. The company has been talking to analysts to focus on the cost of rolling out the next-generation variants of the B-class compact, Actros long-haul truck and M-class SUV.

It has also pointed out raw material and foreign exchange risks, according to the insider who declined to be identified. The expenses of the model will burden second-half earnings by 400 million euros or $548 million to 500 million euros.

On the other hand, foreign exchange and raw material expenditures will contribute around 450 million euros to expenses, according to analyst Arndt Ellinghorst at London-based Credit Suisse. The automaker is aiming for record sales of Mercedes-Benz automobiles this 2011, and last month moved forward with its objective of supplying 1.5 million cars annually to 2014.

Still, worries about the economic climate caused CEO Dieter Zetsche to ask politicians to restore faith in financial markets. German investor confidence in October dropped to lowest in nearly three years, partly due to the debt crisis in Europe. Daimler said on Tuesday that it is standing by a target for a "very significant" increase in 2011 earnings before interest and taxes even while the economy slows down.

Company spokesperson Florian Martens stated that there is "no intention" to modify the current estimate. On October 27, the company will report third-quarter results. Based on the average forecast of 27 analysts that Bloomberg interviewed, Daimler will post a 28 percent rise in EBIT to 9.14 billion euros this year.

Equipped with pioneering automotive technology, the third generation of the M-Class from Mercedes-Benz is able to establish new standards for the SUV segment. It has everything customers want, from having an excellent ride comfort mixed with amazing driving dynamics to being fitted with the best in passive safety. This latest generation of the M-Class also has its energy efficiency optimized.

Furthermore, the design of the interior has been changed in order to deliver outstanding ergonomics. In fact, the new M-Class is the best example of the brand’s safety concept which is Real Life Safety. This is the philosophy that is based on what happens should an accident actually occur.

With a passenger cell that is made of high-strength material and combined with deformation zones on the front and rear, it results in the M-Class having the best and effective basis for its occupant protection systems. For those familiar with the assistance systems of the E-Class and S-Class, this same system is in the M-Class which enhances the driver-fitness safety and active safety.

Aside from the safety features, the figures for its fuel consumption and emissions are more than impressive. On the average, the fuel efficiency of the M-Class range is 25% better than the model before it. This is likely the first time that a Mercedes-Benz model has managed to lower fuel consumption by this much especially for an SUV model.

The improvement in the efficiency is due to a number of factors that include having an ultramodern engine line-up, wide-ranging BlueEFFICIENCY measures, and top-of-the-class Cd value at 0.32. They also put in new development tools like the energy-transparent vehicle also helps with the fuel efficiency.

Another factor is the ML 250 BlueTEC 4MATIC. When compared to the prior model, it is economical by as much as 28% as fuel consumption is 6.0 1/100 km under the NEDC driving cycle with CO2 emissions at 158 g/km. This means one can go as far as 1,500 kilometers on a full tank.

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