Daimler expects global truck sales to be "significantly higher" in 2018 as its 2Q profits fall due to weaker pricing
Worldwide earnings were down for Daimler AG in the second quarter of 2018 despite higher unit sales in both its Daimler trucks and Mercedes-Benz vans divisions during the period.
Daimler recorded a net profit of €1.8 billion during the quarter, down on the €2.5 billion recorded over the same period in 2017, while unit sales rose 10,500 to 833,000, one per cent higher.
Company revenue fell to €40.8 billion from €41.2 billion in 2017, while group earnings before interest and tax fell to €2.6 billion, from €3.7 billion the year before.
Daimler attributed the earnings downturn to “temporarily weaker pricing including tariffs” in its cars division – saying that its Trucks division earnings of €546 million were consistent with the earnings of the same period last year.
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While division earnings remained the same, Daimler Trucks recorded a six per cent rise in unit sales to 123,900 vehicles during the quarter, with unit sales in Asia rising 13 per cent to 40,300 vehicles – thanks to a significant increase in sales in Indonesia and India.
The company expects popularity in these markets to continue, amid the recovery of some important markets over the course of the year.
“Daimler Trucks assumes that it total unit sales in the year 2018 will be significantly higher than in the previous year,” it says.
Daimler also expects higher unit sales in its vans division, thanks to demand from China and the United States as well as the newly introduced Sprinter and X-Class models.
Yet the Vans arm suffered a “significant” fall in earnings during the second quarter, falling from €349 million in the second quarter of 2017 to €152 million in 2018.
This came as advance expenditure on new technologies and the Sprinter model change offset a record number of unit sales – at 110,900 for the second quarter of 2018, up 7 per cent on the prior year.
“Expenses incurred in connection with service activities initiated for diesel vehicles and delivery delays also had a negative impact on earnings,” the company says.
Daimler AG chairman Dieter Zetsche says the company plans to add “numerous” new models and technologies in the year ahead.
“We are focusing on innovative technologies not only with our CASE strategy, at the same time, we are using Project Future to shape our company for a sustainable and successful future,” he says.
“In this way, Daimler is optimally positioning itself for the future in terms of technology, culture and structure.”