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Diesel refit, recall weigh on Daimler profits

October 20, 2017

Net earnings at the world's largest luxury carmaker have taken a dive, Daimler's latest quarterly earnings report has shown. It's the result of several costly campaigns, while overall sales left nothing to be desired.

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Daimler cars
Image: picture-alliance/dpa/S. Kahnert

Between July and September, profits attributable to shareholder at the Mercedes-Benz maker fell by over 16 percent year on year to 2.2 billion euros ($2.6 billion), the company reported Friday.

The drop in third-quarter net earnings came even as the Stuttgart-based firm sold 9 percent more vehicles and increased revenue by 6 percent year on year.

But profits were undermined by a massive recall costing 230 million euros and a refit of older diesel engines to reduce harmful nitrogen oxides emissions, costing 223 million euros.

The carmaker announced in July it would need to upgrade 3 million vehicles in Europe to cut emissions.

Bright future ahead?

The Mercedes and Smart unit has also invested heavily in new technologies, promising a flotilla of new electric models in the next few years.

Looking ahead to the full year, the group maintained its forecast that revenue and operating profit would increase significantly compared with 2016.

CEO Dieter Zetsche said Friday efforts continued to strengthen the firm's position on markets through structural reform. The carmaker announced earlier this week it was intending to separate the firm's passenger car and commercial vehicle segments to make them more flexible and prepare them for more partnership deals with IT companies.

Carmakers lose time in race for modern mobility

hg/jd (AFP, Reuters)