Mercedes Warns on Earnings

The strong euro and the cost of eliminating quality problems will eat into earnings at Mercedes, the luxury car brand of German-US auto giant DaimlerChrysler, a Mercedes executive said. "The dollar is a problem for us," Mercedes CEO Eckhard Cordes told the Financial Times Deutschland. Around 20 percent of the one million Mercedes cars sold last year were sold in the United States, Cordes said. In addition, "we will have to do what is necessary to eliminate quality problems. And that will have an effect on our 2005 earnings," he continued. Mercedes faced technical problems with several models last year. It had to recall 680,000 of its new E-Class car due to a braking system fault. "We want to make Mercedes number one in terms of quality in the premium segment. We want to be better than BMW, Audi or Lexus,"

Cordes said.