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Daimler’s Q1 Profit Grows With Increased Mercedes Sales In China


04/17/2021


Daimler’s Q1 Profit Grows With Increased Mercedes Sales In China
The German luxury auto maker Daimler reported better than expected profits for the first quarter because of increase in demand for luxury Mercedes-Benz form Chinese consumers as well as higher prices for the cars which helped the company to offset the lump because of the Covid-19 pandemic.
 
The comp[any noted a 60 per cent rise in sale of Mercedes-Benz cars in the Chinese market which touched a total of 220,520 vehicles during the first quarter which was more than the number of cars sold by the company in continental Europe by the German car maker where in the company reported a rise of 1.8 per cent in sales with total vehicles sold at 192,302.
 
"Favourable sales momentum at Mercedes-Benz Cars driven by all major regions, especially China, strongly supported the product mix and pricing in the first quarter," Daimler AG (DAIGn.DE) said in a statement on Friday.
 
This better performance in the Chinese market also showed the recovery in the Chinese economy during the first quarter which recorded a growth of 18.3 per cent for the quarter compared to the same quarter a year ago when the pandemic had severely hit the country’s economy. The pandemic has prevented the wealthy Chinese consumers from travelling who instead spent their disposable money on luxury items.
 
That trend among Chinese consumers also helped Daimler to stage a turnaround for 2020 with the company reporting higher sales in the luxury Mercedes-Benz which helped it to offset the decline in sale and revenues in some of the other regions where it operates. This also helped the company to perform better than its other German peers including BMW and Volkswagen which also reported significant rise in their sales in the Chinese market in March.
 
In the first three months of 2021, the company’s quarterly adjusted group earnings before interest and tax jumped to 5 billion euros ($6 billion) compared to 719 million euros a year before, Daimler said. That number surpassed the average analyst expectations of 4 billion euros which prompted the company to release key figures a week ahead of schedule. The comparable 2019 figure was 2.3 billion euros.
 
"The headline numbers are an impressive beat even ahead of whisper numbers, but we think many investors were already positioned for a blow-out quarter," UBS analysts wrote.
 
The EQS, the first electric car built on a dedicated platform, was unveiled by Daimler on Thursday which is pitted to rival the global dominance of Tesla in the area of electric cars.,
 
The better than expected performance in the quarter also helped the company’s shares to rise by 3.1 per cent which reached their highest level in more than 5 years. 
 
A global shortage of semiconductors has hit the global auto industry resulting in a number of global auto companies to curb production which included the likes of Ford, General Motors) and Volkswagen.
 
Daimler has said that the chip shortage had largely not affected its production process.
 
(Source:www.investing.com)