Daimler investors are not too happy with Mercedes-Benz’ ambitious sales and profit targets.
According to the Detroit News, many investors believe Mercedes’ long-term sales and profit targets are impossible to meet and also contradictory.
In order to become the world’s largest premium carmaker, Mercedes wants to more than double sales to 2.7 million by 2020. Last year, the brand sold 1.26 million cars, 120,000 fewer than archrival BMW. Mercedes also targeted an operating profit margin of more than 10 percent in 2020. Over the last 10 years, its sales rose only 1.4 percent, while BMW’s rose 6 percent and Audi’s 7.4 percent.
One reason for this is the fact that Mercedes’ traditional markets are under threat because of government rules advocating lower fuel consumption. This is why the brand has decided to build new, economical small cars. But small cars are cheaper and offer small profit margins, hence the investors’ discontent.
Investors are also unhappy with the fact that Daimler employs too many workers making to few cars (40 percent more workers than BMW’s are making 20 percent less cars). Also, Daimler has an unnerving habit for investors of suddenly withdrawing its estimate of profits and replacing it with a much worse one without warning. It happened twice recently, at the end of September and in October.