© Reuters. FILE PHOTO: The Daimler brand is seen earlier than the Daimler annual shareholder assembly in Berlin, Germany, April 5, 2018. REUTERS/Hannibal Hanschke
By Nick Carey
LONDON (Reuters) -Daimler AG reported the next quarterly revenue on Friday regardless of a 30% drop in Mercedes-Benz unit gross sales as a consequence of a worldwide semiconductor chip scarcity, because it centered on extra worthwhile luxurious automobiles and lower prices, and mentioned it ought to meet its 2021 revenue targets.
The German premium carmaker mentioned it expects chip provides to enhance within the fourth quarter. It mentioned the scarcity ought to proceed in 2022 however ought to enhance in comparison with 2021.
The firm has beforehand warned the worldwide chip crunch might final into 2023.
“This (chip) issue will continue to be a top priority for us moving forward,” Chief Financial Officer Harald Wilhelm informed analysts throughout a convention name.
Wilhelm additionally informed analysts Daimler (OTC:) is transferring improvement and manufacturing actions for compact and midsized combustion-engine transmissions to contract producer and auto components provider Magna, so the German carmaker can focus on electrifying its mannequin vary.
“The future of Mercedes is all electric,” he mentioned.
Daimler shares are up 45% yr thus far, the strongest acquire amongst German carmakers.
The chip crunch has pummeled the auto trade this yr. Carmakers, which shuttered crops because the COVID-19 pandemic took maintain final yr, have discovered themselves competing towards the sprawling client electronics trade for chip provides.
Supply chain snarls from a fireplace at a chip-making plant in Japan to coronavirus lockdowns in Malaysia, central to world chip provides, have solely compounded the issues.
The scarcity of chips, utilized in every part from brake sensors to energy steering to leisure techniques, has led automakers world wide to chop or droop manufacturing, pushing up each new and used car costs amid sturdy demand from customers.
This week world No. 2 carmaker Volkswagen AG (OTC:) lower its outlook for deliveries, toned down gross sales expectations and warned of price cuts because it reported a lower-than-expected quarterly working revenue.
Other main carmakers, together with Stellantis, General Motors (NYSE:) and Renault (PA:), have additionally seen their quarterly outcomes damage.
Daimler mentioned it had saved a “tight grip” on prices through the third quarter because it centered on extra worthwhile fashions together with in its Maybach and efficiency AMG manufacturers.
“In light of historically low wholesale volume… this is a very remarkable earnings level and it proves the point that
management is on track to lowering the break-even point at Mercedes Cars,” Bernstein analyst Arndt Ellinghorst wrote in a consumer observe.
Daimler mentioned it now expects Mercedes-Benz to put up barely decrease gross sales in 2021, however maintained its forecast of an adjusted margin of between 10% and 12%.
It additionally maintained its forecast of a margin of 6% to eight% for its Daimler Trucks unit, which is because of be spun off in December.
The German carmaker posted a quarterly working revenue of two.6 billion euros ($3 billion), up 18% from 2.2 billion euros for a similar interval in 2020. Analysts had anticipated a revenue of two.3 billion euros, Refinitiv estimates confirmed.
Its income slipped to 40.1 billion euros from 40.3 billion a yr earlier.