Automotive News   |   Automotive News Europe   |   Autoweek   |   Automobilwoche

Automotive News China Newsletter
Register our free newsletter, sent each Monday and Thursday

     Automakers   Suppliers   Auto Show   Comment   Car Cutaway   Newsletters   Press Releases   Chinese Version   Register for Newsletter
  Contact Us:   Editorial   Advertising   Subscription Information   |   About Us   Media Kit
Home >> Automaker Email this story   Print this story
 
Daimler cuts 2018 profit outlook as China tariffs strike U.S.-made SUVs
Reuters | 2018/6/22

FRANKFURT -- Daimler warned profit would fall in 2018 as new import tariffs on light vehicles exported from the United States to China would hurt sales of high-margin Mercedes-Benz SUVs.

Daimler earnings before interest and taxes would now be slightly below the previous year's level, rather than slightly above, the company said in a regulatory filing late Wednesday.

Daimler's revised forecast comes as U.S. President Donald Trump is proposing to impose tariffs on imported vehicles on grounds that trade imbalances on many products threaten U.S. national security. He is separately promising to impose tariffs on up to $200 billion of Chinese goods. China has warned it would retaliate with levies on U.S. products, potentially including the Mercedes-Benz SUVs shipped to China from Alabama.

Separately on Wednesday, the CEO of Volvo Cars warned that higher tariffs could undermine the Chinese-owned automaker's plans to hire up to 4,000 workers at a new vehicle assembly plant in South Carolina.

Stocks in a wide range of companies have see-sawed in recent weeks as investors tried to assess the risk to corporate profits from the Trump administration's trade policy.

Daimler is one of the biggest global companies to cut its profit outlook and blame trade tensions. The German industrial firm's revised forecast came on the same day as reports that German automakers backed a proposal that the European Union drop tariffs on vehicles to defuse trade tensions.

While the U.S. and China have not yet imposed new tariffs, Daimler said it expects that to occur, and that the automaker will not be able to recover the costs from customers.

"Fewer-than-expected SUV sales and higher-than-expected costs, not completely passed on to the customers, must be assumed because of increased import tariffs for U.S. vehicles into the Chinese market," it said in a regulatory filing.

Daimler also said a new vehicle certification process based on stricter fuel efficiency test procedures will hit sales in the second half of the year, and warned that earnings at its Mercedes-Benz Vans unit would suffer because of a vehicle recall for diesel models.

Daimler was last month ordered to recall Mercedes-Benz Vito vans fitted with 1.6 liter diesel engines because Germany's motor vehicle authority, KBA, said they breached emissions rules. Daimler has said it will appeal the decision.

As a result, earnings before interest and taxes at its Mercedes-Benz Cars division would now be slightly below the previous year, and significantly below the previous year's level in the vans division, Daimler said.

Related Stories
  • Daimler weighs a larger stake in BAIC joint venture, sources say
  •     --Published:2018/7/12
     
  • Daimler, Geely form ride-hailing JV in China
  •     --Published:2018/26/10
     
  • Who will follow BMW and gain control of key China operations?
  •     --Published:2018/19/10
     
  • Daimler, Geely team up on ride-hailing venture
  •     --Published:2018/12/10
     
  • NavInfo secures navigation map contract with Daimler
  •     --Published:2018/31/8
     
  • Daimler in talks to build Smart EVs in China, sources say
  •     --Published:2018/10/8
     
  • Daimler, Baidu deepen automated driving alliance
  •     --Published:2018/27/7
     
  • BYD, Daimler to recapitalize EV partnership
  •     --Published:2018/1/6
     
  • Geely's Daimler stake should have been disclosed earlier, Germany says
  •     --Published:2018/15/5
     
  • Daimler has plan in case new Chinese shareholder turns hostile
  •     --Published:2018/4/5
     
  • Daimler may buy tiny stake in Volvo, report says
  •     --Published:2018/24/4
     
  • Daimler investor Li warns automakers must talk or face oblivion
  •     --Published:2018/20/4
     
  • Daimler to discuss cooperation in China with Geely's Li Shufu
  •     --Published:2018/6/4
       
     
     

    Our Newsletter Editions
    Automotive News China produces two email newsletters each week. You can sort your news by the articles highlighted in each of our newsletters here.

    Select your newsletter     

     
     

    Automotive News China
    Room 1303, Building 2, Lane 99, South Hongcao Road,
    Shanghai 200233
    Telephone: 86-139-1851-5816
    Fax: 86-21-6495-0895
     
    Home | Help Center | About Us | Privacy Policy | RSS
    Entire contents © Crain Communications, Inc.
    Use of editorial content without permission is strictly prohibited. All Rights Reserved.
    ICP06057291