Stuttgart: Daimler AG said an uptick in the call at the end of the quarter had prevented mercedes-Benz car manufacturer from wasting as much as analysts expected.
Daimler reported an initial deficit of 1.68 trillion euros ($1.9 trillion) before interest and tax in a statement. This exceeded a consensus estimate of 2.1 billion euros provided by the German manufacturer, who said that loose money and liquidity were also more than expected.
Daimler and his companions were decimated through the coronavirus pandemic, with measures to involve the disease, which reduced production by degrees last noticed after World War II. Although factories and showrooms have now largely reopened, business is picking up unevenly, with car sales in Europe picking up more slowly than in North America or China.
The effects are “consistent with an observation sometimes a step ahead of German brands in recent weeks,” Said Philippe Houchois, Jefferies analyst with a buy-to-rent note on Daimler’s stock, in a note. Volkswagen AG said orders were gradually expanding in Germany, but warned that the recovery remains fragile and that long-term progress is difficult to predict.
Mercedes-Benz shipments to China, the brand’s largest market, reached a record quarter and global retail sales of their cars increased in June.
To drive, the company is preparing to launch new versions of its flagship S-Class sedan, a key profit engine that continues to outperform its competitors, adding the BMW 7 Series.
The S-Class will be flanked by an all-electric brother, named EQS, the first car on an electric car platform committed to a diversity of more than 700 kilometers. CEO Ola Kallenius said Mercedes planned to consolidate its offerings, especially in the lucrative segment of larger luxury vehicles.
It remains to be noted whether the call is improving enough to make a significant difference in Daimler’s full year perspective. The world’s largest distributor of luxury cars and advertising cars said it expects vehicle deliveries, revenues and profits to decline from 2019, when the effects have been slowed due to legal disorders and production errors.
Kallenius said during Daimler’s annual general meeting last week the carmaker must sharpen its cost-cutting efforts to shore up returns. In reviewing its global manufacturing network to get rid of excess capacity, it may sell a factory in France and has already halted plans to expand a site in Hungary.
The company can also eliminate a small meetinghouse in Brazil and is discussing plant characteristics in South Africa and Mexico, Handelsblatt reported.
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