Daimler’s quarterly operating profit has fallen by 16% as a €718m (£620m) one-off gain failed to offset the impact of falling sales in China and production delays at three Mercedes-Benz factories.
Sales of Mercedes-Benz cars fell 7% in the first quarter 0f 2019, partly because of manufacturing bottlenecks for the A-Class compact car in Aguascalientes, Mexico, the Mercedes-Benz van in Charleston, South Carolina, and the Mercedes-Benz GLE SUV in Tuscaloosa, Alabama.
Mercedes-Benz sales in China, the world’s largest car market, fell 3%.
“We cannot and will not be satisfied with this, as expected, moderate start to the year. We now have to work hard to achieve our targets for 2019,” said Dieter Zetsche, the company’s chief executive.
Daimler blamed new suppliers for problems launching an SUV platform, causing production delays for the new high-margin GLE model. “Daimler is blaming supplier bottlenecks and quality issues pretty much across all divisions for its poor financial performance. To be clear: it’s management’s job to manage its supply chain and relationships with partners,” Evercore ISI analyst Arndt Ellinghorst said.
Earnings before interest and tax fell to €2.8bn, below the €2.89bn expected by analysts despite a €718m valuation boost from the merger of the mobility services divisions of Daimler and BMW.