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Daimler sees operating loss as auto sales drop due to coronavirus

AFP
Published : Apr 29, 2020, 1:46 pm IST
Updated : Apr 29, 2020, 1:50 pm IST

In January-March, Daimler reported a 92 percent slump in net profit

 Daimler sees operating loss ahead in Q2 over virus. (PTI Photo)
  Daimler sees operating loss ahead in Q2 over virus. (PTI Photo)

FRANKFURT: German carmaker Daimler warned Wednesday that it would likely make an operating loss in the `second quarter due to the impact of the coronavirus pandemic.

"For the second quarter, we see the full impact of the lockdown" imposed in many countries to slow the virus' spread, finance director Harald Wilhelm told reporters in a telephone conference.

That would mean "lower sales volumes and significantly reduced production volume".

Last year, Daimler fell into the red in the second quarter as it had to set aside large provisions to deal with fallout from the widening "dieselgate" emissions cheating scandal.

If Daimler's Q2 outlook is confirmed, it would only be the second time the Mercedes-Benz maker has posted a quarterly operating loss since the financial crisis in 2009.

In January-March, Daimler reported a 92 percent slump in net profit, to 168 million euros, as unit sales shrank 17 percent and revenue six percent.

Over the coming three months, "we're expecting a tough quarter, not only in Europe, but also in North America," chief executive Ola Kallenius said.

Meanwhile "a certain amount of normality" has returned to the Chinese market, with "demand and production on the way back," Kallenius added.

Daimler plans to reduce its investments "below 2019's level", rather than upholding the same amount of spending as previously announced.

But new technologies like electrification and digitalisation remain "non-negotiable elements of future", CEO Kallenius said.

Tags: daimler ag, daimler, coronavirus pandemic, coronanvirus lockdown, mercedes benz, net profits, german carmaker
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