April 22, 2021

Daimler Abandons Forecast Amid Dismal Market

PARIS — Daimler, the maker of Mercedes-Benz cars, said Wednesday that it was abandoning its 2013 profit forecast in the face of a dismal European market.

The company, which is based in Stuttgart and also makes buses and trucks, said it expected demand in Western Europe to continue hovering “around a 20-year low” this year. “The German market,” it added, “cannot detach itself from this development and is expected to fall significantly short of the previous year’s level.”

The carmaker said it still expected group revenue to rise this year. But even operating from the assumption that the second half of the year would be better than the first, it said it no longer believed it would be able to match its 2012 operating profit of about €8.1 billion, or $10.5 billion.

Despite poor sales in Europe, Ford Motor said Wednesday that its net profit climbed 15 percent in the first quarter, to $1.6 billion, as record results in North America compensated for losses in Europe and South America.

The company reported a pretax loss of $462 million in Europe, about triple the $149 million it lost in the region in the first quarter of 2012.

Ford has said it expected a loss of up to $2 billion this year in Europe, where weak economic conditions have driven new vehicle sales to their lowest level in decades.

The company is closing a major assembly plant in Belgium and accelerating other cost cuts in Europe. It said the “outlook for the business environment in Europe remains uncertain.”

Results in Asia, where Ford is investing heavily in new factories and products, improved slightly. The company said it had a pretax profit of $6 million in the region compared with a $95 million loss a year earlier.

Car sales in the European Union totaled just under three million units in the January-March period, down 9.8 percent from the period a year earlier. Last week, the European Automobile Manufacturers’ Association described that as the worst start to a year since it began collecting the data in 1990.

In Germany, sales fell 17.1 percent last month, and the luxury segment, which long escaped the worst of the downturn, is now shrinking as well. In another worrying sign, recent data have shown the German economy, the largest in Europe, losing steam, meaning things may get worse.

European automakers may also find themselves competing at a disadvantage against Toyota, Nissan and Honda, after the Bank of Japan began a campaign to end deflation that has driven down the yen and made vehicles built in Japan relatively less expensive in other markets.

Daimler said its quarterly net profit slid 60 percent from a year earlier, to €564 million. Its earnings before interest and taxes, a measure favored by analysts, fell 56 percent, to €917 million, lower than the most pessimistic forecast in a Reuters survey of analysts. Revenue fell 3 percent, to €26.1 billion.

Daimler had warned this month that it was reassessing its forecasts, raising expectations that its rivals might follow suit. But that caution was not mirrored at Volkswagen, the largest European automaker, which said Wednesday that it planned to meet expectations, holding operating profit steady in 2013.

Despite the difficult market, “we remain confident overall that we can pick up speed over the rest of the year,” Martin Winterkorn, the VW chairman, said in a statement. Volkswagen, based in Wolfsburg, Germany, reports its first-quarter results on Monday.

In Paris, PSA Peugeot Citroën said its first-quarter auto sales fell 10.3 percent, outpacing the European market decline. The French company does not report profit or loss on a quarterly basis.

Peugeot, the second-largest European automaker, relies heavily on the Continent for its sales. It said Wednesday that its efforts to expand in China had paid off well in the first quarter, as its unit sales there increased 31 percent.

Bill Vlasic contributed reporting from Detroit.

Article source: http://www.nytimes.com/2013/04/25/business/global/daimler-abandons-forecast-amid-dismal-market.html?partner=rss&emc=rss

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