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Daimler prepares for potential profit warning

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Daimler prepares for potential profit warning
Photo: DPA
15:51 CEST+02:00
The head of German carmaker Daimler said on Wednesday that European demand had been weaker than expected in early 2013, paving the way for a possible lowering of the company's annual targets.

"Not much tailwind is anticipated from the markets in the coming months," a company statement quoted CEO Dieter Zetsche as telling the annual shareholder's meeting.

"For Europe in particular, there are no signs of a trend reversal," he was quoted as saying.

"Daimler will therefore reassess whether its previous market-related assumptions for 2013 are still valid," Zetsche said, adding the company would give more information about full-year earnings expectations when it publishes its first-quarter results.

The group, which produces Mercedes cars and trucks and the Smart city car, is due to publish those results on April 24th.

It had banked on increasing sales this year and in 2014 and posting earnings before interest and tax (EBIT) barring exceptional items of about €8.1 billion ($10.6 billion) for 2013, along the same lines as last year.

The group reiterated on Wednesday that it expects the second half of the year to be better than the first.

Daimler said it had sold more cars, vans and buses in the first three months of this year than in the same period a year earlier despite the fact that "many markets were weaker than expected at the beginning of 2013."

"That applies in particular to the markets for cars and commercial vehicles in Europe," it said.

Meanwhile, US auto giant General Motors will invest €4 billion ($5 billion) in its German subsidiary Opel and its British sister brand Vauxhall in 2013-2016, its chief announced Wednesday.

"As a global automotive company, GM needs a strong presence in Europe, in terms of design and development as well as manufacturing and sales," GM chairman and chief executive Dan Akerson said at Opel headquarters in western Germany.

Opel is "on the right track" and has GM's "full support" in its restructuring plan as well as its aim to balance its books by mid-decade, Akerson told gathered Opel chiefs, local politicians and workers.

The German carmaker has been making losses for years as it has been slow to react to the crisis in demand for cars in Europe, and GM has ordered Opel's management to prescribe draconian cost-cutting.

AFP/jcw

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