German automaker Daimler AG (DDAIF.PK) on Wednesday reported higher wholesale shipments in its first quarter in most of its divisions, despite weak European markets. The company also assumes that second-half earnings will be higher than in the first half thanks to new products and the ongoing efficiency programs. At the Annual Shareholders' Meeting, Dieter Zetsche, Chairman of the Board of Management, also affirmed its long-term strategy and goals.
Looking ahead, Daimler said it continues to expect to sell at least 1.6 million Mercedes-Benz passenger cars each year as of 2015. The company also projects to sell more than 500,000 truck units in 2015 and over 700,000 units in 2020. It also expects to grow in its other divisions.
Further, the company said in the medium term, it strives to achieve an average return on sales of 9 percent from its vehicle operations across all market and product cycles, with return targets for the individual divisions of 10 percent for Mercedes-Benz Cars, 8 percent for Trucks, 9 percent for Mercedes-Benz Vans and 6 percent for Buses.
In order to achieve its goals, Daimler said it has started the biggest growth program in the company's history, and these various programs in its divisions would improve its cost position by 4 billion euros by the end of next year.
Stating his confidence that these goals will be achieved, Zetsche emphasized, "We don't want to grow at any price. Our growth has to be sustainably profitable.....For 2013 and the following years, the focus is on the consistent implementation of the defined measures and programs. The objective for this year is to stay the course, continue our growth and enhance our efficiency."
Regarding its latest trading, the company said it sold more cars, vans and buses in the first quarter than last year, even though many markets, particularly markets for cars and commercial vehicles in Europe, were weaker than expected at the beginning of 2013.
First-quarter wholesale shipments by Mercedes-Benz Cars increased 1 percent and the retail growth was 3 percent. Despite the difficult quarter, the divisions assumes that its wholesale shipments will increase in full-year 2013 with the expansion of the total car market of 2 to 4 percent.
Trucks' wholesale shipments decreased 6 percent, yet it increased its market shares in the quarter. The division anticipates slight growth in wholesale shipments as the year progresses thanks to its global spread and its strong, continuously growing product portfolio.
Mercedes-Benz Vans' wholesale shipments grew 3 percent. In regional terms, the division anticipates a slight recovery in China as well as sales stimulus in North and Latin America, but demand for vans in Western Europe is projected to continue to fall.
In the Buses segment, wholesale shipments climbed 23 percent in the quarter, and it expects an increase in wholesale shipments for the full year. Financial Services division also showed growth with increase in new business.
In the coming months, the company said it does not anticipate many changes in the markets. In such scenario, Daimler said it will provide further market information and earnings expectations for the full year in the first-quarter reporting, after reassessing whether its previous market-related assumptions for 2013 are still valid.
In addition, at the Annual Shareholders' Meeting, shareholders will vote on a previously recommended stable dividend of 2.20 euros per share.
On Frankfurt's Xetra, Daimler shares are currently trading at 41.76 euros, up 0.90 euros or 2.20 percent.
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