Daimler CEO Dieter Zetsche forecasts big increases in demand for Mercedes-Benz, especially in China.
Daimler AG’s first-quarter net profit nearly doubled to $1.65 billion, revenue increasing by 17% on stronger sales across the company’s business lines – which, in turn, prompted a prediction of record sales for Mercedes-Benz passenger cars this year.
“We achieved excellent earnings in the first quarter. This puts us well ahead of our planning and confirms our positive outlook for the year 2011,” Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, said in a statement Friday.
Insisting the company is “on the right track,” Zetsche said Daimler is counting on delighting customers w with new product, “continuous innovation and new technologies” in order to “continue our profitable growth.”
Revenues climbed to $34.7 billion, largely reflecting a 12% increase in unit sales in the first quarter to 310,700 vehicles.
Zetsche added the very positive development of earnings reflected the ongoing upward trend in nearly all the Daimler Group’s divisions. Mercedes-Benz Cars, Daimler Trucks and Mercedes-Benz Vans all increased their unit sales compared with the prior-year period in all major regions. Especially in China, the Mercedes-Benz Cars division was able to significantly increase its demand, the CEO said.
China is now the world’s largest automotive market and demand has been particularly strong in the luxury segment, though sales are also showing significant growth in mid-market segments and among makers targeting first-time buyers in the country’s second and third-tier cities.
With the U.S. market recovering and China expected to continue growing at a torrid pace, Mercedes-Benz Cars assumes that the tri-star brand will increase its unit sales to a new record of more than 1.2 million cars in 2011.
Meanwhile, Daimler Trucks posted a 27% increase in unit sales in the first quarter and Mercedes-Benz Vans increased its unit sales by 16% when measured against the first quarter of 2010.
Daimler Financial Services also profited in particular from lower cost of risk.
Following an already substantial increase in 2010, Daimler expects its total revenues to continue to grow in 2011, the maker said in a statement.
That growth will probably be driven by all the automotive divisions. On the basis of the divisions’ planning, Daimler anticipates a significant increase in total unit sales.
Based on current estimates, the Daimler Group expects to post significantly higher EBIT – or Earnings Before Interest and Taxes — from its ongoing business in 2011 than in 2010. Developments in the first quarter have shown that Daimler continues to make good progress toward the targeted rates of return that it intends to achieve on a sustained basis as of the year 2013, the maker said.