Daimler Results Aiming for Pole Position

Daimler reached a record in sales and operating profits in 2014 thanks to the introduction of new Mercedes models and strong appetite for the German luxury cars in China and the United States.
Mercedes cars are in demand.

Germany’s second-largest luxury carmaker after BMW could succeed in becoming number one if it continues its successful turnaround, led by Dieter Zetsche, the chief executive also known as Dr. Z.

Daimler sold 8 percent more vehicles in 2014, bringing sales to a record 2.5 million, especially thanks to 1.7 million sold passenger cars. Prices for Mercedes cars start from $31,500 to more than $130,000 in the United States.

“Daimler is currently benefitting from a large number of new models coming to the market,” credit analyst Christian Strätz of public bank BayernLB in Munich told Handelsblatt Global Edition.

The current achievements are just a preview of what is to come. Dieter Zetsche, Chief executive of Daimler

“Despite record results in the past few years, Daimler has also said to strongly reduce costs in Europe, in Germany. Daimler has done this in addition to the positive business development, which has also helped,” said Mr. Strätz, who covers the car industry.

Daimler, based in Stuttgart in the south of Germany, has reinvigorated its luxury brand Mercedes under the leadership of Mr. Zetsche by introducing new, more stylish models.

Daimler had fallen behind its main rivals BMW and Audi in the year 2009 in sales of passenger cars. A few years ago, Mercedes A- and B-class cars were seen as “old-age cars” with a stale design, and sales in China, the world’s largest car market, had lagged behind those of its two German competitors.

“The current achievements are just a preview of what is to come,” Mr. Zetsche said in a video on Daimler’s Web site. “Our recent development provides just a hint of our future prospects at Daimler. Our soundtrack for 2015 is: You ain't see nothing yet,” he said, with the song running in the background.


Record Results for Daimler-02


Sales rose 10 percent to €129.9 billion, or $148 billion, last year and operating profit from ongoing operations increased 27 percent to €10.1 billion. Net profit fell 16 percent to €7.3 billion from an exceptionally high €8.7 billion in 2013 caused by a one-off benefit of €3.2 billion that year.

Daimler shares were up 1.9 percent to €82.20 by 9a.m. on Thursday on the Frankfurt exchange.

A new S-Class car, Daimler’s top luxury model which starts at $94,400 in the United States, and a 23-percent increase of Mercedes car sales in China helped boost the company’s results. An 8 percent rise of Mercedes car sales in the United States, its biggest geographic market, was also an important factor in pushing up revenue.

In China, Daimler still has to catch up with rivals BMW and Audi, Mr. Strätz of BayernLB said.

“Compared to other carmakers they have been slow to enter the market and there is a need to catch up,” Mr. Strätz said.

He found it positive Daimler predicted a significant growth of sales and operating profits from continued operations.

“Daimler has been a bit cautious in recent years, which makes it a sign of confidence to hear this,” Mr. Strätz said.



Gilbert Kreijger is an editor with Handelsblatt Global Edition in Berlin, covering companies and markets. To contact the author:  [email protected]