Daimler, the maker of Mercedes-Benz cars and trucks, put the pedal to the medal in the third quarter, reporting record car-unit sales and revenue and bringing good news to the German auto industry in the wake of the Volkswagen emission scandal.
The Stuttgart-based automaker sold 720,000 cars and commercial vehicles between July and September, up 13 percent from the same period the year before. Mercedes cars had their strongest quarter to date with unit sales of 508,400, up 18 percent.
New sports utility vehicles, or SUVs, and premium compact sports cars have been a hit with consumers. The division’s strong performance, the company said, was also due to competitive pricing and strong demand for its C-Class sedans.
The only blemish in an otherwise impressive third-quarter performance was a 14-percent dip in net profit to €2.42 billion, down from €2.82 billion in the same period last year, though the year-ago quarter was boosted by the sale of a stake in Rolls-Royce Power Systems. Adjusted earnings – stripping out one-time effects – actually rose year-over-year.
Daimler’s share price dipped on the opening of trading Thursday but recovered by the early afternoon, trading up 0.34 percent at €73.79 by 12:30 local time in Frankfurt.
“Daimler benefited in the third quarter from a relatively large number of new models and demand for its SUVs, especially in North America but also in China.”
Mercedes is poised to overtake Audi, a Volkswagen unit, this year as the world’s second-largest maker of luxury cars, and hopes to close the gap to the sector’s market leader, BMW in Munich.
In general,eye-catching designs have helped Mercedes shed its “gray-haired” image and spur sales, car analysts say.
“Daimler benefited in the third quarter from a relatively large number of new models and demand for its SUVs, especially in North America but also in China,” Sascha Gommel, chief auto analyst at German bank Commerzbank, told Handelsblatt Global Edition.
Demand for SUVs, widely viewed as gas-guzzlers, often hinges on oil prices. “If oil prices were to go up, that could be a problem,” Mr. Gommel said. “But they’re very low at the moment.”
Daimler’s group revenue rose by 13 percent to €37.3 billion ($42.3 billion).
Mr. Gommel said he was particularly impressed with the free cash flow at €4.8 billion, “which was more than expected” and reflected “the quality of earnings,” with “no accounting gimmicks” to spruce up earnings.
Daimler was able to increase business in China, the world’s biggest auto market, despite sluggish demand for pricey foreign cars amid an economic downturn. Its unit sales were up 39 percent, outshining those of German luxury-car rivals BMW, with a 2 percent gain, and Audi, with nearly level sales, but the company said its expects demand there to rise only slightly due to the cooling economic climate.
Nevertheless, Daimler aims to add another 50 stores to its dealer network in China, bringing the total to around 500 by the end of the year.
Daimler’s strong third-quarter performance is good news for the German auto industry, which has been severely shaken by the VW emission scandal. The Wolfsburg-based carmaker, the world’s largest in the first half of this year, admitted last month that it had cheated on emission tests for its diesel cars.