Daimler AG yesterday said that early-year growth for its main Mercedes-Benz division would be erased by a global semiconductor shortage that the automaker expects to put a damper on the second half.
Mercedes vehicle sales are expected to be roughly flat this year rather than up significantly from last year. The lack of chips will have an adverse impact on the business as the year progresses and visibility on how supply would develop is low, Daimler said.
Rivals from Volkswagen AG to Jeep maker Stellantis NV have coped with the scarcity of chips better than initially feared, but also said that the issue would affect earnings later this year.
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Facing limitations on how many assembly lines they can keep running, automakers are prioritizing output of their biggest moneymakers and abstaining from discounts customers are accustomed to, even from luxury brands.
“The entire industry is currently struggling with longer delivery times, which unfortunately also affect our customers,” Daimler chief executive officer Ola Kallenius said. “We are doing what we can to minimize the impact.”
BMW AG, which has said it expects a “solid” increase in deliveries to customers this year, outsold Mercedes by more than 26,000 units in worldwide second-quarter sales and took over pole position in the US because of better access to chips.
Sales in the third quarter might be below the second quarter and could stabilize in the fourth quarter if no additional bottlenecks occur, Kallenius told analysts.
Despite the semiconductor shortage, Daimler’s second-quarter revenue came in better than analysts expected, climbing 44 percent to 43.5 billion euros (US$51.2 billion). The manufacturer also slightly raised the outlook for margins at its trucks and buses unit, and mobility division.
Earnings before interest and taxes surged to 5.19 billion euros, the company said, confirming preliminary numbers released last week. Profit margin at the cars and vans division reached double digits for a third straight quarter.
Daimler in April had forecast that Mercedes would be more profitable than it has been in years, thanks to resurgent vehicle demand in the midst of the COVID-19 pandemic. At the time, the company raised its projection for annual return on sales for its cars and vans division to 10 to 12 percent, up from 8 to 10 percent.
Executives were more somber this quarter, warning headwinds from raw material prices are poised to intensify in the second half and the company might not be able to compensate for that with efficiency gains like in the first six months.
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