Daimler chief vows to beat BMW in car sales

DAIMLER CHIEF executive Dieter Zetsche vowed yesterday to beat BMW in luxury car sales by 2020 with a slate of new Mercedes-Benz models aimed at reversing the carmaker’s slide in market share.

“We aim to be the front-runner wherever we compete on a permanent basis,” Mr Zetsche said in a speech to shareholders at the company’s annual meeting in Berlin. “Wherever we are not number one, we will strive to become it.”

The gathering marks the last opportunity for Mr Zetsche to sell his strategy to shareholders before his contract comes up for renewal.

The 58-year-old executive, who heads the car division in addition to his job as CEO of the German automaker, is rolling out models like the entry-level Mercedes A-Class hatchback and new variants of the S-Class flagship in a bid to reclaim the luxury-car lead that Daimler lost in 2005.

The new vehicles are aimed at boosting sales growth, which averaged 1.4 per cent over the past 10 years compared with 6 per cent at BMW and 7.4 per cent at Volkswagen’s Audi, according to data from IHS Automotive. The sluggish expansion caused Mercedes’s share of the high-end car segment to slump to 21.4 per cent last year from 25 per cent in 2001.

“One can justifiably speak of a lost decade for Daimler,” Ingo Speich, a Frankfurt-based fund manager with Union Investment, said in a speech at the meeting.

Daimler stuck to its goal to increase sales and match 2011’s record earnings before interest and taxes of €9 billion this year, Mr Zetsche said, adding that 2012 will be a “transitional year” for the company. Daimler’s shares fell as much as €1.22 euros, or 2.7 per cent, to €44.55 and were down 2.1 per cent at 11.13am in Frankfurt trading. The stock has gained 31 per cent this year valuing the company at €47.6 billion.

“Zetsche has identified the weaknesses and is heading in the right direction, but the competitors are ambitious too,” said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany.

In the first quarter, Mercedes posted record deliveries and is targeting growth of more than 4 per cent for the full year to beat last year’s all-time high. – (Bloomberg)