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Daimler Lowers 2012 Profit Target for Cars Division

Daimler Lowers 2012 Profit Target for Cars Division

Weak European economy and China competition are cited as factors behind the reduced expectations.

German automaker Daimler (IW 1000/15) on Thursday lowered its forecast for full-year operating profit for its cars division amid a difficult economic climate and stiff competition in China.

Daimler CEO Dieter Zetsche said while visiting a company plant that the group expected earnings before interest and taxes (EBIT) for 2012 to be lower than last year, a spokesman told AFP.

The Stuttgart-based group, which makes Mercedes-Benz and Smart cars as well as trucks, had been anticipating an EBIT along the lines of that of 2011, or 5.2 billion euros (US$6.7 billion).

"Due to difficult economic conditions, we think that the second half of the year at Mercedes-Benz Cars will be weaker than the first and that, as a consequence, we will be below the level of last year for the whole of the year," the spokesman quoted Zetsche as saying.

"The market is weak in Europe and the competition is very intense in China," he added during the visit to the Untertuerkheim plant, in the western city of Stuttgart.

Copyright Agence France-Presse, 2012

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