The company’s second-quarter operating profit jumped 54 percent and hit record levels thanks to the sales increase coming from the Mercedes-Benz luxury brand that rose faster than premium competitors.
Earnings before interest and taxes from ongoing business have reached 3.78 billion euros ($4.13 billion), the best level for any quarter at the German automaker and surging past analyst predictions, with sales also jumping 19 percent to 37.5 billion euros. Mercedes-Benz took charge and refreshed almost its entire lineup and the brand managed to resist to sliding sales in China, the world’s largest auto market, where rivals are now posting negative results. Bigger peers BMW AG and Audi AG have come up with less optimistic forecasts for their prospects on the key market and even delivered subsidies to their dealers to counter the industrywide slump. Mercedes-Benz is now pushing hard to surge past both to reclaim the world’s best-selling title by the end of the decade. “They have strong momentum from new products as well as positive currency effects,” commented Arndt Ellinghorst, a London-based analyst at Evercore ISI, adding the earnings margin from the cars division could surge to as much as 12 percent.
Second-quarter Ebit at the Mercedes-Benz Cars unit, which includes the Smart brand, skyrocketed 58 percent to 2.23 billion euros, with a return on sales of 10.5 percent – way higher than the 7.9 percent figure seen last year and beating a long-imposed threshold. Chief Executive Officer Dieter Zetsche added the automaker will be able to keep up with the margin goal at the auto unit, seeing a “strong” second half for Mercedes on the back of new model introductions.