Daimler profit surge brings it closer to BMW, Audi image

The German automaker recently reported its profit for the first three months of the year has jumped 41 percent, mostly buoyed by the record sales of its Mercedes-Benz luxury brand.

The company managed to beat hands down analyst forecasts and has insured the opportunity to finally shed the profitability difference with larger rivals BMW AG and VW Ag’s Audi. Mercedes-Benz, the top of the line unit of the firm, had been posting lower revenue and earnings margins than BMW and Audi, not to mention being third in global sales rankings behind the duo in recent years, after being the world’s largest premium brand for decades. Now the cap has been closing in as the automaker has introduced a new generation of its best-selling C-Class line and is expanding its range of profitable sport utility vehicles. “Daimler is revving up and closing in on rivals,” comments NordLB analyst Frank Schwope.”The next two business years should be fairly profitable.”

The company’s adjusted earnings before interest and tax (EBIT) soared by 41 percent to 2.93 billion euros, with an earnings margin for the Mercedes-Benz Cars unit (it includes the Smart brand) of 9.2 percent. BMW and Audi, set to publish their own quarterly financial results sometimes next week, had a return on sales last year of 9.6 percent, while Mercedes only managed to reach around 7 percent. Mercedes-Benz posted record sales in Europe, China and the United States and the company is mounting an SUV offensive this year to keep the increases – the new GLE Coupe, a new generation of the GLC (formerly the GLK) and is also previewing new crossovers.