© Reuters. File photo: The Daimler logo appeared before the Daimler Annual Shareholders’ Meeting in Berlin, Germany, on April 5, 2018. REUTERS / Hannibal Hanschke
By Nick Carey
LONDON (Reuters)-Daimler reported higher quarterly profits on Friday, although Mercedes-Benz sales fell by 30% due to a global shortage of semiconductor chips, as it focuses on cars that increase profits and cut costs , And stated that it should achieve its profit target by 2021.
The German high-end automaker said it expects chip supply to improve in the fourth quarter. He said that the shortage is expected to continue until 2022, but is expected to improve from 2021.
The company previously warned that the global chip crunch may continue until 2023.
“This (chip) issue will remain our top priority in the future,” Chief Financial Officer Harald William told analysts on a conference call.
William also told analysts that Daimler (OTC:) is transferring the development and manufacturing of compact and medium-duty internal combustion engine transmissions to subcontractors and auto parts supplier Magna so that the German automaker can focus on The electrification of its model series.
“The future of Mercedes is completely electric,” he said.
Daimler shares have risen 45% so far this year, the largest increase among German automakers.
The chip crisis hit the auto industry this year. Automakers closed their factories during the COVID-19 pandemic last year and found themselves competing with the huge consumer electronics industry for chip supply.
The grunts in the supply chain, from a fire at a chip manufacturer in Japan to the coronavirus lockdown in Malaysia, which is the core of global chip supply, will only make the problem worse.
The shortage of chips used in various fields, from brake sensors, power steering to entertainment systems, has caused global automakers to cut or stop production, push up the price of new cars, and provide opportunities in the context of strong consumer demand.
This week, Volkswagen (OTC:), the world’s second-largest automaker, lowered its delivery forecasts, lowered its sales forecasts, and warned of cutting costs because it reported lower quarterly operating profit expectations.
Other major automakers include Stellatis, General Motors (NYSE:) and Renault (Pennsylvania:), their quarterly performance has also been punished.
Daimler said that by focusing on more profitable models, especially the Maybach and AMG brands in terms of its performance, it maintained “strict control” on costs in the third quarter.
“Given the historically low wholesale volume… this is a very significant level of profit, which proves
Management is expected to lower the breakeven point of Mercedes cars,” Bernstein analyst Arndt Ellinghorst wrote in a customer report.
Daimler stated that he now expects Mercedes-Benz’s sales in 2021 to decline slightly, but maintains his forecast for an adjusted profit margin of between 10% and 12%.
It also maintains a profit margin forecast of 6% to 8% for its Daimler truck division, which is expected to split in December.
The German automaker reported quarterly operating profit of 2.6 billion euros ($3 billion), an increase of 18% from the 2.2 billion euros in the same period in 2020. According to Refinitiv’s estimates, analysts had previously expected a profit of 2.3 billion euros.
Its turnover fell to 40.1 billion euros from 40.3 billion euros in the same period last year.