Daimler expects to recover lost output in second half caused be chip shortage
Bottlenecks causing a shortage of semiconductor chips will reduce its sales mostly in the first quarter
London — Daimler expects significant improvements in sales and operating profit in 2021 and will make up for lost production caused by a semiconductor chip shortage by the end of the year, the German carmaker said on Thursday.
The outlook sent shares in the maker of Mercedes-Benz cars up 2.5%.
Bottlenecks causing a shortage of semiconductor chips will reduce its sales mostly in the first quarter, Daimler said. Much of the auto industry has struggled to maintain production levels because of the chip shortage.
Ola Källenius, chair of the board of management of Daimler and Mercedes-Benz, said during a video conference that Daimler expects chip supply to improve in the second quarter.
He said Daimler had made its sales expectations clear to its suppliers, but did not find out until December 31 that it would face a shortage in the first quarter.
The carmaker also confirmed its preliminary financial results for 2020, said economic conditions in major markets should return to normal in 2021 and that it did not expect further setbacks as a result of the pandemic.
In common with rivals, Daimler is racing to bring more electrified models to market to meet tightening CO emissions standards in Europe and China.
Källenius said that sales of electric vehicles in 2021 could double as a percentage of Daimler's overall sales.
Sales of plug-in hybrids and electric vehicles made up 7.4% of Mercedes-Benz car sales in 2020, up from 2% in 2019.
Following cost savings and a faster-than-expected recovery in the auto sector, Daimler said last month its group earnings before interest and taxes for 2020 came to €6.60bn.
Earlier in February, it said it planned to spin off Daimler Truck, the world's largest truck and bus maker, as it seeks to increase its investor appeal as a focused electric, luxury car business.
Daimler ended 2020 with adjusted free cash flow of €9.2bn vs €2.7bn a year earlier.
Plant shutdowns in the first half of 2020 to slow the spread of the novel coronavirus led many in the industry to expect a disastrous year, but a market rebound spurred by China helped the industry recover faster than expected.
Similar to its German rivals BMW and Volkswagen, Daimler benefited from Chinese demand for high-margin luxury vehicles.
"China had a remarkable recovery," Källenius said.
Mercedes-Benz sales in China jumped more than 22% in the fourth quarter and 11.7% for 2020 as a whole.
While Daimler said it expected its premium car business to increase more than 7.5% in 2021, it expected its sales in China in 2021 to grow at a slower pace of between 2% to 7.5%.
Group revenue and operating profit for 2021, it expected to rise more than 7.5%, with an adjusted margin from its Mercedes cars and van business of between 8% and 10%.
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