BAIC Motor Corp Ltd's shares slumped as much as 13.5 percent on Wednesday following a media report saying Germany's Daimler AG was considering increasing its stake in its joint venture with the Chinese automaker.
FRANKFURT: Daimler AG said its financial targets have become harder to achieve after a tough start to the year, forcing the auto manufacturer to step up efforts to drive down costs.
The Mercedes-Benz maker’s first-quarter profit slumped 16 percent after a decline in deliveries combined with the rising cost of developing new models, the Stuttgart-based company said in a statement on Friday.
While earnings met analyst expectations, Daimler Chief Executive Officer Dieter Zetsche said the result fell well short.
“Achieving the financial targets for 2019 has not become easier since the first quarter,” Zetsche said in a statement.
“We now have to work hard to achieve our targets for 2019.”
The carmaker still expects group earnings before interest and tax to “rise slightly” this year.
Daimler in February already vowed to cut costs to shore up falling profits. Since then, Mercedes-Benz deliveries through March have declined 5.6 percent with the manufacturer Friday giving scant fresh detail about how to reverse a profitability decline in the main cars unit to 6.1 percent from 9 percent from a year ago.
Weak quarter
Daimler is reportedly considering a reduction of about 10,000 jobs through voluntary measures as part of 6 billion euros ($6.7 billion) in savings at the cars operations by 2021.
Zetsche, who’s departing in May, earlier flagged a weak first-quarter margin in the cars unit because of the cost of upgrading the GLE sport utility vehicle and ramping up a joint Mexican factory with Nissan Motor Co.
Investors are likely to look beyond first-quarter woes and focus on CEO-designate Ola Kallenius taking over in May, Bloomberg Intelligence analyst Michael Dean said in a report.
“We anticipate his new strategic plan will be unveiled this summer.”
Daimler shares fell 1.3 percent to 57.70 euros Thursday, valuing the world’s largest manufacturer of luxury cars and commercial vehicles at 61.7 billion euros. After a dismal 2018, the stock has gained 26 percent since the beginning of the year, outpacing German rivals BMW AG and Volkswagen AG. - Bloomberg
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