Daimler Expects to Reach Gains in Europe in the Second Half of the Year image

Daimler expects the second-half of the year to bring significant gains in earnings as demand in Europe begins to increase and more customers are attracted by the new models.

The German automaker relies on the nest-generation top-of-the-line S-Class and the new Mercedes-Benz CLA compact four-door coupe to increase its market share during the second half of the year, according to CEO Dieter Zetsche. He added that besides optimistic plans regarding future sales, the automaker also see proceedings and cost-cutting efforts to be better than the previous expectations.

“Profits have already improved and the majority of the planned savings are expected in the second half of the year,” said Daniel Schwarz, a Frankfurt-based analyst with Commerzbank. “This gives increased confidence that the earnings will improve sequentially in the coming quarters.”

Thanks to the A-Class hatchback Daimler has managed to counter a drop in auto sales in Europe to a 20-year low. The automaker also wants to add more high-end models, such as the stretched Pullman version of the S-Class, and reach a total of 13 new vehicles with no predecessor by 2020, in an attempt to surpass no.1 BWM in luxury auto sales by the end of the decade.

Profits during the second quarter dropped to 6.4% from 8.7% in 2012, due to Daimler passenger-car unit’s spending on new models. Daimler predicts that demand in western Europe will slowly improve in the second half of the year.

Source: Bloomberg