Mercedes Sales Down

Reuters ^ | 4-09-03 | Madeline Chambers

[doosee]

DaimlerChrysler Dampens Profit Outlook

Wed Apr 9,11:59 AM ET

By Madeline Chambers

BERLIN (Reuters) - German automaker DaimlerChrysler AG said on Wednesday that a tougher business climate this year would make it far harder to raise profits as planned, despite encouraging signs in the first quarter.

The world's fifth-biggest carmaker, two thirds of the way through a three-year overhaul at its U.S. Chrysler unit, said in February it aimed to lift its adjusted operating profit this year from last year's 5.8 billion euros ($6.14 billion), provided that economic conditions remained stable.

"It has become much more difficult to reach the targets we have set ourselves...nonetheless we will make every effort to achieve them," Chief Executive Juergen Schrempp said at the relatively subdued annual meeting attended by about 8,500 shareholders who made the most of the free beer and sausages.

"Obviously not everything always works to perfection... The environment will remain very challenging for us this year," added Schrempp, who looked relaxed, even cracking the odd joke.

It was a far cry from the tense meeting two years ago when the company had just launched its recovery plan at loss-making Chrysler and some investors were calling for Schrempp's head.

DaimlerChrysler may have got its own house in order, but it now faces a tougher environment.

Weak economic conditions and subdued consumer sentiment have dampened demand for vehicles in Daimler's most important markets of the U.S. and western Europe and industry experts say the war in Iraq (news - web sites) has increased uncertainty about this year's outlook.

At 11:44 a.m. EDT, DaimlerChrysler shares were up 1.1 percent at 30.82 euros, while the DJ Stoxx European autos index was 0.4 percent higher.

"On balance I think the message is fairly neutral," said JP Morgan analyst Himanshu Patel, who has an "overweight" rating on the stock.

DaimlerChrysler stock has fallen about four percent so far this year, outperforming the European autos index, which is down around 12 percent.

But the stock has lost over two thirds of its value since the 1998 merger of Chrysler, then the most profitable U.S. carmaker, and German industrial jewel Daimler-Benz. That share price fall has angered some shareholders.

"I think a more apologetic tone is required when you talk about the share price," said Lars Labryga of small German shareholder group SdK.

A possible sale by Deutsche Bank of its 12 percent stake in Daimler is a cap on the shares but analysts say the bank may wait for a market rebound to get a better price.

GROWING PESSIMISTIC

The maker of luxury cars, trucks and buses said its forecast assumed that the war in Iraq would be concluded soon and that no other factors would arise to harm the economies most important to DaimlerChrysler's business

[doosee]

I liked the idea of shareholders getting free beer and sausage at their meeting while they were told of gloomy sales predictions. Anyone think the management there is real happy with Schroder?

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[goldstategop]

I think Chrysler sells. The Mercedes division of the company has had lagging sales. Someone can correct me if I'm wrong.

[HuntsvilleTxVeteran]

So the government bailed out chrysler only to
have it sold to a german company.
Can we sue to recover any money and interest
used to bail out chrysler?

[goldstategop]

Sue Schroloser for the difference, plus interest.

[xm177e2]

I liked the idea of shareholders getting free beer and sausage

Hmmmm... sounds like a good reason to buy some stock.

[doosee]

I think Chrysler sells.

They are swapping part components between Chrysler and Mercedes now. I think they are forever bound. However, if and when the Krauts wise up and dump their socialist government, I think they will put this behind them.

[HHFi]

I am so disgusted with Germany that I absolutely refuse to give up my 10-year-old Saturn and buy a new Mercedes.

[mercy]

Personally I've found a deep new appreciation of Lexus and Infinity. This is a true revolution for me. I was going to pick up a new Leica R9 as well but now I think I'll go ahead and get the new Canon top of the line digital camera. I've recently developed a strong desire to see Mt. Fuji too. My craving for sushi has really increased lately as well. I wonder if they still have those places where little Japanese women walk on your back? Hmmmmmm.

[Yaron]

American not good enough for you? Traitor.

[Beck_isright]

Well, I blasted my Dodge dealer when he asked me when I was going to trade in my pickup. I told him that I will be getting a Chevy or a Toyota and that I don't do business with companies that are part of an enemy nation. He looked at me bug eyed and said "but Dodge is 100 percent American". I reminded him at that point it was owned by the Nazis, er Germans, and that until the German infestation changed their government or removed their influence from Chrysler, hell would freeze before I bought another one of their products. That hurt him since I own two Dodge trucks and usually trade them in every 2-3 years.

V

[Dasaji]

You know, I see your point on that, Dodge being part of the German Ownership.

*However*, red-blooded Americans still put these vehicles together (for the most part) - in this case, you can support the "troops" (the UAW folks) and not the "war" by remaining a loyal Dodge customer.

[Beck_isright]

I am. I'm buying a Chevrolet Silverado in all likelihood. Screw the Nazis. I spent 4 years over there defending their sorry butts against the Soviets. Now they treat us like that? Screw them and their companies. All of them. VW. Bayer. Mercedes. Porsche. BASF. They can all get the hell out of the U.S. as far as I'm concerned.

V

[mercy]

That's funny. I've always been an almost xenophobic-buy-American-advocate but I now see the need to support our true friends abroad. One of my vehicles is American and unfortunately I cannot find many items such as those mentioned in my previous post that are still manufactured here.

[ContemptofCourt]

==rolling eyes==

[Beck_isright]

"==rolling eyes=="

Whatever floats your boat.

[bmwcyle]

The Mercedes SUV had been having problems. Owners have been dumping them for different companies.

[Gatún(CraigIsaMangoTreeLawyer)]

Chrysler paid us back about a year after they were given the loan. There is nothing pending.

[ContemptofCourt]

"==rolling eyes==" "Whatever floats your boat."

Cutting off my nose to spite my face does not float my boat...where are those Dodge truck mnfg'd? By whom? Who makes the parts?

You know, sometimes it is helpful to look at the big picture......

[Daniel Ramsey]

Anybody consider now the possible suspension of new Mercedes sales in Iraq? A major market has just evaporated, A lot of European companies are going into a tailspin because Iraq was pumping out cash big time for 3 decades, now its gone.