- Mercedes Car Group EBIT improves from $933 million to $1,628
million STUTTGART, Germany, July 25 /PRNewswire-FirstCall/ --
DaimlerChrysler (stock-exchange abbreviation DCX) today published
key figures for its Mercedes Car Group and Truck Group divisions
and for its Van, Bus, Other segment for the second quarter of 2007
on a preliminary basis. Results for the DaimlerChrysler Group, the
Financial Services division and the discontinued activities of the
Chrysler Group and Chrysler Financial (NAFTA) will be published
together with the complete interim report for the second quarter of
2007 on August 29, 2007, as announced at the beginning of July
2007. (Logo: http://www.newscom.com/cgi-bin/prnh/20020212/DCXLOGO )
Details of the divisions in the second quarter of 2007 The Mercedes
Car Group sold 320,200 vehicles in the second quarter (Q2 2006:
325,500), while its revenues of $17 billion reached the prior-year
level. The Mercedes Car Group posted second-quarter EBIT of $1,628
million, and thus significantly increased it earnings compared with
the prior-year quarter (Q2 2006: $933 million). The increase was a
result of the positive development of the sales mix and the quality
and efficiency improvements achieved within the context of the CORE
program. However, earnings were negatively impacted by
exchange-rate effects in the second quarter of 2007. Second-quarter
sales of 285,600 Mercedes-Benz brand passenger cars were 2% below
the high prior-year figure. 17,200 of the new C-Class model, which
was launched in Western Europe in March 2007, were sold in June
alone, although it had not yet been launched in other major markets
and additional engine versions are still to come. As expected, unit
sales by the smart brand decreased to 31,700 (Q2 2006: 34,500) due
to the discontinuation of the smart forfour, of which 12,000 units
were sold in the second quarter of last year. Unit sales of the new
smart fortwo, which was launched at the end of March, have been
developing very positively. Second-quarter unit sales of the smart
fortwo increased by 44% compared with the prior year. The
comprehensive measures taken to achieve further quality
improvements also had a positive impact. In the past two years, the
number of faults per vehicle delivered was reduced by 25%, which
also led to lower warranty expenses. This positive development has
been confirmed by J.D. Power surveys. The Truck Group sold 112,100
vehicles in the second quarter of this year, which as expected was
lower than the high prior-year figure (Q2 2006: 132,400). The
figure reported in the prior year included an additional 6,200
Sprinter vans produced by Trucks NAFTA. This sales decrease was
primarily due to a drop in demand caused by stricter emission
regulations in the United States, Canada and Japan. Revenues of
$9.3 billion were 19% below the figure for the second quarter of
last year. The Truck Group posted second-quarter EBIT of $813
million (Q2 2006: $791 million). Earnings were boosted by the
positive development of unit sales in Europe and Latin America,
improved product positioning and ongoing efficiency enhancements.
There were also negative effects, however, due to lower sales of
trucks in the NAFTA region and Japan. But the measures initiated
for the management of market cycles and the other initiatives of
the Global Excellence program had a distinct positive effect. The
sale of real-estate properties in Japan led to a capital gain of
$92 million in the second quarter. Unit sales by Trucks
Europe/Latin America increased by 8% to 39,700 vehicles. Trucks
NAFTA sold 24,500 vehicles of the Freightliner, Sterling, Western
Star and Thomas Built Buses brands (Q2 2006: 46,800). The figure
reported in the prior year included an additional 6,200 Sprinter
vans produced by Trucks NAFTA. The substantial decrease in unit
sales is primarily a result of the EPA07 emission regulations,
which came into force this year and led to purchases being brought
forward to 2006. Trucks Asia sold 47,800 vehicles of the Mitsubishi
Fuso brand (Q2 2006: 49,800). In May, Freightliner presented its
new heavy truck, Cascadia, the first truck to be fitted with
engines of the new Heavy Duty Engine Platform. The further
developed Mitsubishi Fuso Super Great model, which fulfills the
new, stricter Japanese emission regulations, was already unveiled
in April. The Van, Bus, Other segment primarily comprises the Vans
and Buses units, the Group's equity interest in the European
Aeronautic Defence and Space Company (EADS), and its real-estate
activities. The second-quarter EBIT of the Van, Bus, Other segments
was $347 million (Q2 2006: $1,516 million). In the prior-year
period, there was a capital gain totaling $1,101 million resulting
from the valuation of derivative financial instruments used to
hedge the price risks of EADS shares; most of this valuation gain
was accounted for by a financial transaction that was completed in
the first quarter of 2007. In total, income from the participation
in EADS was $76 million in the quarter under review compared to
$1,271 million in the prior-year. Mercedes-Benz Vans increased its
unit sales by 13% compared with the prior-year period to 73,800
vehicles. Due to high demand for the new Sprinter, production
capacities in the Dusseldorf and Ludwigs felde plants are fully
utilized. DaimlerChrysler Buses sold 10,300 buses and chassis in
the second quarter, equaling the very high unit sales achieved in
the prior-year period. The development of unit sales was
particularly positive in Latin America. With these sales figures,
DaimlerChrysler Buses maintained its worldwide market leadership.
Both units achieved positive earnings in the second quarter.
Outlook In the second half of this year, DaimlerChrysler expects
the expansion of global automotive markets - both for passenger
cars and for commercial vehicles - to slow down compared to the
same period of 2006. This is primarily due to developments in the
triad markets. In full-year 2007, demand for passenger cars in the
markets of North America, Western Europe and Japan is expected to
fall slightly. However, significant increases in demand for both
passenger cars and commercial vehicles are anticipated for the
emerging markets of Asia and Latin America, as well as for Eastern
Europe. Demand for trucks in North America is expected to fall
sharply. The market volume for trucks in Japan should also be
significantly lower than in the prior year. In view of the positive
economic conditions in Western Europe, DaimlerChrysler anticipates
slightly positive market developments in this region. The Mercedes
Car Group continues to assume that its unit sales in the year 2007
will at least be equal to the record level of the prior year.
Following the launch of two high-volume models in spring - the new
C-Class sedan and the new smart fortwo - the station-wagon version
of the C-Class will be presented at the Frankfurt Motor Show in
September and will be on sale by the end of the year. The division
will continue implementing the CORE program in order to achieve
profitable growth and create sustained value. For full-year 2007,
the Mercedes Car Group expects to achieve a return on sales of
significantly more than 7%. Despite increased expenditure for more
efficient and alternative drive systems, the return on sales should
increase to 10% by the year 2010 at the latest. The Truck Group
anticipates significantly lower unit sales in 2007 than in the
prior year. This is mainly due to the drop in demand due to
stricter emission regulations in the United States, Canada and
Japan. However, unit sales are expected to develop positively in
Europe and Latin America. As a result of strong demand for the
Sprinter and the very positive development of the Vito/Viano
models, unit sales of vans are expected to increase compared to the
year 2006. Despite cyclical market downturns in some key bus
markets, unit sales of buses are anticipated at the high level of
the prior year due to very positive market developments in Latin
America. The special items shown in the following table influenced
EBIT in the second quarters of 2007 and 2006: Special items
affecting EBIT Amounts in millions of $ Q2 2007 Q2 2006 Mercedes
Car Group Discontinuation of smart forfour - (18) Headcount
reductions in the context - (27) of CORE Truck Group Sale of real
estate in Japan (MFTBC) 92 - Van, Bus, Other Income/expenses
relating to the (53) 1,101 transfer of interest in EADS All figures
are preliminary. For the reader's convenience, the financial
information has been translated from Euros into U.S. dollars at an
assumed rate of euro1 = $1.3520 (noon buying rate on June 29,
2007). The convenience translation does not mean that the Euro
amounts actually represent the corresponding Dollar amount stated
or could be converted into Dollars at the assumed rate. This
document contains forward-looking statements that reflect our
current views about future events, including, among others, the
pendency and consummation of the transaction with Cerberus Capital
Management, L.P. regarding Chrysler Group. The words "anticipate,"
"assume," "believe," "estimate," "expect," "intend," "may," "plan,"
"project," "should" and similar expressions are used to identify
forward-looking statements. These statements are subject to many
risks and uncertainties, including an economic downturn or slow
economic growth, especially in Europe or North America; changes in
currency exchange rates and interest rates; introduction of
competing products and possible lack of acceptance of our products
or services; competitive pressures which may limit our ability to
reduce sales incentives and raise prices; price increases in fuel,
raw materials, and precious metals; disruption of production or
delivery of new vehicles due to shortages of materials, labor
strikes, or supplier insolvencies; a decline in resale prices of
used vehicles; our ability to close the transaction with Cerberus
Capital Management, L.P., regarding Chrysler Group; the ability of
the Chrysler Group to implement successfully its Recovery and
Transformation Plan; the business outlook for our Truck Group,
which may experience a significant decline in demand as a result of
accelerated purchases in 2006 made in advance of the effectiveness
of new emission regulations; effective implementation of cost
reduction and efficiency optimization programs, including our new
management model; the business outlook of our equity investee EADS,
including the financial effects of delays in and potentially lower
volume of future aircraft deliveries; changes in laws, regulations
and government policies, particularly those relating to vehicle
emissions, fuel economy and safety, the resolution of pending
governmental investigations and the outcome of pending or
threatened future legal proceedings; and other risks and
uncertainties, some of which we describe under the heading "Risk
Report" in DaimlerChrysler's most recent Annual Report and under
the headings "Risk Factors" and "Legal Proceedings" in
DaimlerChrysler's most recent Annual Report on Form 20-F filed with
the Securities and Exchange Commission. If any of these risks and
uncertainties materialize, or if the assumptions underlying any of
our forward-looking statements prove incorrect, then our actual
results may be materially different from those we express or imply
by such statements. We do not intend or assume any obligation to
update these forward-looking statements. Any forward-looking
statement speaks only as of the date on which it is made. Further
information on DaimlerChrysler is available on the Internet:
http://www.media.daimlerchrysler.com/ Preliminary Figures for the
2nd Quarter 2007/First Half-Year 2007 (in US-$) All values,
including the 2006 figures, are converted from Euro figures with
the exchange rate of 1 euro = US-$ 1.3520 (based on the noon buying
rate on June 29, 2007) EBIT by Divisions Q2 Q2 Change Jan-Jun
Jan-Jun Change in millions of $ 2007 2006 07/06 2007 2006 07/06
Mercedes Car Group 1,628 933 + 74 % 2,699 -61 . Truck Group 813 791
+ 3 % 1,526 1,361 + 12 % Van, Bus, Other 347 1,516 - 77 % 2,878
2,010 + 43 % Revenues by Divisions Q2 Q2 Change Jan-Jun Jan-Jun
Change in millions of $ 2007 2006 07/06 2007 2006 07/06 Mercedes
Car Group 16,978 16,896 + 0 % 33,297 33,035 + 1 % Truck Group 9,369
11,503 - 19 % 19,225 21,455 - 10 % Van, Bus, Other 4,564 4,424 + 3
% 8,461 8,688 - 3 % Unit Sales Q2 Q2 Change Jan-Jun Jan-Jun Change
(in units) 2007 2006 07/06 2007 2006 07/06 Mercedes Car Group
320,200 325,500 - 2 % 591,200 607,000 - 3 % Truck Group 112,100
132.400(1) - 15 % 231,300 245.800(1) - 6 % Vans 73,800 65,600 + 13
% 135,500 125,300 + 8 % Busses 10,300 10,300 + 0 % 18,600 18,100 +
3 % (1)The figure reported in the prior year included an additional
6,154 Sprinter vans produced by Trucks NAFTA.
http://www.newscom.com/cgi-bin/prnh/20020212/DCXLOGO
http://photoarchive.ap.org/ DATASOURCE: DaimlerChrysler AG CONTACT:
Han Tjan, +1-212-909-9063, or Thomas Frohlich, +49-(0)711-17-41361,
both of DaimlerChrysler AG Web site:
http://www.daimlerchrysler.com/
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