Daimler sees increased profit, buoyed by China growth image

Germany’s Daimler AG, the parent company of Mercedes Benz – the third largest premium automaker in the world – has forecasted its profit would continue to surge in 2015, riding on increased sales in China.

According to the carmaker, the world’s largest auto market is a place where traditionally first-time buyers actually go for a luxury ride, and not a mass-market offering. Mercedes expects to deliver “significantly” above the 300,000 units mark when taking into account combined sales of its two units – Mercedes-Benz and Smart. The China performance would be more than 6.5 percent better than figures registered in 2014, when the Mercedes-Benz Cars division (it includes Smart) managed an overall tally of 281,600 vehicles. “Of course China is not a country of unlimited potential, but it does offer us tremendous opportunities,” commented Dieter Zetsche, Daimler’s chief executive officer. “It’s remarkable how many Chinese customers already buy a premium model as their first automobile.”

If China manages to increase its economic stimulus – forecasts announced the second-largest world economy would grow at its slowest pace since 1990 – Daimler could profit even more, lifting overall demand for new cars and SUVs. The German automaker managed to post a rapid ascension last year, outpacing its competitors after the company restructured its entire operation there and introduced numerous new models. Mercedes is still playing catch-up to its larger global rivals – with Audi being first and BMW second on the Chinese luxury market. The company, the third-biggest premium manufacturer, but the world’s largest truck maker, announced it wants to increase profitability in the midterm, with a 9 percent return from sales targeted in the years to come after having a 7.8 percent earnings margin last year.

Via Automotive News Europe