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Trade wars contribute to Daimler’s lower profits

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Dieter Zetsche, CEO, Daimler

Global trade disputes played a part in Daimler’s net profit falling by €3 billion to €7.6 billion ($8.7 billion) last year, compared with 2017.

In addition, the decline in diesel car sales as well as disruption caused by the introduction of the new WLTP emissions test in Europe in September eroded the bottom line, said CEO Dieter Zetsche, who also heads the main brand, Mercedes-Benz Cars.

The global trade disputes, largely initiated by US President Donald Trump, have seen import tariffs levied on finished vehicles, autoparts and on the key input materials of steel and aluminium.

Other factors affecting profit included increased raw material costs and ongoing legal proceedings for diesel vehicles, especially for Mercedes-Benz cars and vans.

However, group sales rose 2.4% to 3.4m units in 2017, with Mercedes-Benz cars at a record high of 2,382,800, for the eighth consecutive year. Turnover was 2.1% higher at €167 billion.

“Our unit sales and revenue figures for both the group and the divisions show that our product range is as attractive as ever and that customer demand remains high,” said chief financial officer Bodo Uebber. “Our core business is very well positioned despite the challenging conditions. We have therefore achieved a high level of earnings overall.”

Looking ahead, the group forecasts unit sales and revenue to rise slightly, in part thanks to positive developments in global automotive markets.

But earnings will be adversely affected by the ongoing high expenditure for innovative technologies and new models, including electrifying the entire portfolio of Mercedes-Benz Cars by 2022.