Mercedes-Benz's parent company, Daimler, has released a statement confirming that it has cut its profit forecast for 2018, effectively blaming a trade war between the United States and China, as well as the upcoming implementation of new emissions regulations.
“Due to current developments, Daimler AG has made a new assessment of the earnings potential for the year 2018,” the firm said in a statement.
“From today's perspective, the decisive factor is that, at Mercedes-Benz Cars, fewer than expected SUV sales and higher than expected costs – not completely passed on to the customers – must be assumed because of increased import tariffs for US vehicles into the Chinese market,” the statement continued, adding that this effect could not be “fully compensated by the reallocation of vehicles to other markets”.
Essentially, the firm is saying it expects sales in China to drop due to an increase in import tariffs for US-made vehicles (such as the GLE, GLE Coupé and GLS SUVs built at its Tuscaloosa plant in Alabama) being brought into the Chinese market.
“As another decisive factor, a negative effect on earnings is to be expected in the second half of the year in connection with the new certification process WLTP (Worldwide Harmonised Light Vehicles Test Procedure).
“Furthermore, earnings at Mercedes-Benz Vans are affected in connection with the recall of diesel vehicles. Additionally, earnings at Daimler Buses are negatively affected by the declining demand in Latin America,” Daimler said.
As a result, Daimler says it now expects earnings before interest and taxes for 2018 to be slightly below the previous year at Mercedes-Benz Cars; significantly below the previous year's level at Mercedes-Benz Vans; in the magnitude of the previous year at Daimler Buses; and slightly below the previous year's level for the Daimler Group as a whole.
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