The parent company of Mercedes-Benz, the third biggest premium automaker in the world, announced its second-quarter profit climbed 12%, buoyed by cost cutting efficiency and increased sales for the top of the line S-Class.
A statement released by Stuttgart, Germany-based Daimler, said that the company’s EBIT (earnings before interest and taxes) climbed from 2.19 billion euros to 2.46 billion euros ($3.32 billion) year-over-year. Mercedes-Benz Cars’ Ebit, which includes the Smart brand, also rose from 6.4 to 7.9% of the revenue.
“Our strategy is bearing fruit,” Chief Executive Officer Dieter Zetsche said in the statement. “Supported by our product offensive and the successful continuation of our efficiency programs, we look to the future with optimism.”
“Generally, Mercedes should be able to reach a higher margin level than BMW,” also commented Daniel Schwarz, a Frankfurt-based analyst at Commerzbank AG. “Mercedes can charge higher prices than BMW and Audi and they are making improvements on the cost side.”
Zetsche plans to retake the top global position in the luxury segment from BMW, while also raising the company’s Ebit to 10%. To achieve that, the company plans to release 30 new models and further cut spending by 2 billion euros by the start of 2015. So far, Mercedes-Benz has expanded its compact line-up and introduced new generations for the C and S Class, while the mid-sized E-Class went through a mid-life refresh.