Daimler expects impressive sales in the first-quarter of 2011

Article by Christian A., on March 6, 2011

Daimler AG expects first-quarter vehicle sales to increase significantly after its January-February 2011 sales rose 16.6 percent compared to the same period a year ago. Joachim Schmidt, the sales chief of Daimler's Mercedes-Benz Cars group, said that it had a strong start for the new year and that sales “continued to develop positively” in February.

Daimler is on track to achieve its full-year target of posting record vehicle sales this year, surpassing the 2007 level of 1.293 million cars. In February, unit sales rose by 10.0 percent, with a 10.3 percent increase in sales of Mercedes-Benz branded cars. Sales of Smart brand cars rose by 6.6 percent.

Daimler posted a profit margin of 8.3 percent in the fourth quarter of 2010, from reporting 9.5 percent in the third quarter, as the company raised the Mercedes-Benz unit's development spending by 15 percent to EUR3.1 billion ($4.3 billion),

Delivery times for build-to-order cars in Germany have increased to almost 13 weeks on average compared with the usual eight-week waiting period. Last February, Daimler revealed plans to expand its global work force by 10,000 people this year. About 4,000 of these new positions will be in Germany.

In February, Daimler Chief Executive Officer Dieter Zetsche said that its growth in 2011 will be constrained by factory limits instead of demand. Zetsche will be the first of the German auto top honchos to discuss 2011 targets when he reports fourth-quarter earnings.

Zetsche, who also serves as president of auto industry group ACEA, has remarked that while the economy in Europe is on the rise, it is likely that auto companies will find 2011 to be a tough one. He said that while it is true that the European auto industry is on the road to recover from the financial and economic crisis, the macro economic circumstances in Europe continue to be “very challenging.”

BMW AG, Volkswagen AG and Daimler AG -- Germany's big three carmakers – all added about EUR67 billion ($90 billion) in market value since the end of the 2009. All three carmakers are expected to post 2011 profits surpassing pre-financial crisis highs amid Chinese and United States demand.

According to analysts, BMW and VW will probably post earnings before interest and taxes for 2011 beating records set in 2007 and 2008, respectively. They also expect Daimler’s earnings to rise to the highest level since 1999, when it was still combined with US carmaker Chrysler. Daimler's Mercedes-Benz, BMW as well as VW all reported record deliveries in January 2011.

Thanks to sales advances in the two largest auto markets – US and China – BMW, VW and Daimler have a combined market value of EUR157 billion, which is around 75 percent higher from the end of 2009.

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