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Daimler: Results exceed expectations thanks to recovery in China

Daimler: Results exceed expectations thanks to recovery in China

German carmaker Daimler reported a larger-than-expected rise in first-quarter operating profit thanks to higher vehicle prices and strong demand in China.

 

The manufacturer published this Friday a preliminary operating profit of 5.75 billion euros in the first quarter, compared to 719 million euros a year earlier, an increase of more than 800%.

 

This result is higher than the average expectations of analysts, who were counting on 4 billion euros, which prompted the group to publish its key figures earlier than expected.

 

“The favourable sales dynamics of Mercedes-Benz Cars in all major regions, especially in China, strongly supported the product mix and prices in the first quarter,” Daimler said.

 

The day before, Volkswagen had also said that China was one of the drivers of the global car industry’s recovery.

 

“Daimler was able to benefit from this development thanks to a convincing product substance combined with significant fixed cost reductions,” Daimler added.

 

The company, which is due to publish detailed quarterly results on 23 April, said adjusted industrial free cash flow reached €2.8 billion, compared with a consensus of €1.8 billion.

 

The acceleration of electric cars

 

The group unveiled on Thursday evening the EQS, the electric version of the Mercedes S-Class, the iconic reference for luxury sedans. A way of tackling Tesla’s terrain.

 

The EQS is the first of a family of Mercedes-Benz cars built on a platform dedicated to electric vehicles. It will go on sale in Europe and the US in August and in China in January. Pricing for the launch date has not yet been revealed.

 

“We have set the bar very high” with this car, Daimler CEO Ola Källenius told journalists. “Customers in this segment expect a mix of hi-tech innovation and modern luxury… and that is what we are trying to achieve with the EQS.”

 

With this model, with a range of up to 770 kilometres (478 miles) and a new display screen that will cover almost the entire dashboard, an optional feature, Mercedes could well soon be competing with Tesla.

 

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Indeed, analysts see an effort to compete with Tesla, which had a head start on other carmakers and boasted longer battery life and a signature touchscreen infotainment system.

 

In a note to customers earlier this week, Deutsche Bank called the EQS a “Tesla hunter for Mercedes” and said the car “will probably set the benchmark in terms of technical features as well as design and quality” for both traditional carmakers and newcomers like Tesla.

 

Britta Seeger, Mercedes’ sales director, said the launch of the EQS coincides with a demand for electric vehicles that is growing faster than company executives had anticipated.

 

“We thought that by 2030, half of our sales would be electric vehicles” and plug-in hybrids, Seeger said on a conference call. “What we’re seeing now… is stronger customer demand for EVs. We’re even more positive that that jump can be a little bit faster.”

 

Read also > LUXURY CAR : DAIMLER ACCELERATES ELECTRIFICATION THANKS TO STRONG START TO THE YEAR

Featured Photo : © Mercedes

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