One-off and diesel issue costs hammer Daimler
Luxury carmaker seeks further cost cuts after second-quarter operating loss of €1.56bn
Frankfurt — Luxury carmaker Daimler says it will intensify cost cuts after legal risks for diesel-related issues and the cost of replacing Takata airbags triggered a €1.56bn loss before interest and taxes in the second quarter.
The German company said €4.2bn in one-off expenses contributed to the operating loss in the quarter, compared with a €2.6bn profit in the same period in 2018.
“In general, we are intensifying the group-wide performance programmes and reviewing our product portfolio in order to safeguard future success,” CEO Ola Kaellenius said on Wednesday.
For Daimler, the pressure to clean up combustion engines has come at a time when the industry has to invest heavily in electric and self-driving vehicles, and cope with slowing growth in China, weak markets in Europe and a rise in global trade tensions.
Passenger car sales slowed 3% during the quarter and the return on sales at Mercedes-Benz Cars swung to a negative 3% in the quarter, down from 8.4% in the year-earlier period.
Earlier in July, the Stuttgart-based carmaker pre-released earnings in what amounted to its fourth profit warning in 13 months, saying its 2019 group earnings before interest and taxes would be “significantly” lower than in 2018.
Daimler said it expected unit sales of Mercedes-Benz Cars and Vans to stay at the prior-year level, thanks to increased product momentum in the second half. Sales of trucks and buses are expected to rise, the company said.