Trade wars and development costs hit profits at Mercedes-Benz
Strong US sales help General Motors outperform but Toyota lowers forecasts
Daimler said the return on sales at Mercedes-Benz cars fell again in the fourth quarter and the company expected that to continue in 2019. Photograph: Michaela Rehle/Reuters
Top automakers reported mixed results and cautious outlooks on Wednesday.
Germany’s Daimler saw fourth-quarter operating profit fall 22 per cent as trade wars and ballooning costs for developing electric and self-driving cars hit profits at Mercedes-Benz cars, the company said.
In the United States, General Motors reported a swing to a quarterly profit, thanks to high-margin pickup trucks and crossovers in the US market alongside cost-cutting. All of the number-one US automaker’s profit came from North America, overcoming an overall drop in the number of vehicles it sold.
And quarterly operating profit at Japan’s largest automaker, Toyota, edged up as rising sales in Asia, including China, offset lower sales in North America, its biggest market.
But Toyota lowered its full-year net profit forecast to 1.87 trillion yen from a previous view of 2.3 trillion yen. It reiterated its annual operating profit projection of 2.4 trillion yen.
Daimler said the return on sales at Mercedes-Benz cars fell again in the fourth quarter and the company expected that to continue in 2019.
“We are below our long-term target margins. We cannot be satisfied with this. Our goal is to return to our target margin corridor of 8 per cent to 10 per cent by 2021,” Daimler chief executive Dieter Zetsche said in a statement.
For 2019 Daimler said it expected a slight growth in unit sales, revenue and earnings before interest and tax (ebit).
General Motors’ profits fell less than expected despite the Detroit automaker citing a “volatile” year in which it was hit by $1 billion in tariff-related commodity costs.
Full-year 2018 adjusted earnings per share fell 1 per cent to $6.54, well above GM’s prior forecast of $5.80 to $6.20. Fourth-quarter adjusted earnings fell to $1.43 per share, above market expectations of $1.24 per share and final-quarter revenues rose 1.8 per cent year on year to $38.4 billion, above a market consensus of $36 billion.
“We navigated significant headwinds in 2018. The actions we’ve been taking to shape a stronger, more profitable portfolio position GM for long-term success,” chief financial officer Dhivya Suryadevara said in a statement.