Daimler AG increases its financial perspective for the whole year

Economic data from the euro area show that the manufacturing sector is doing much better than services.

More surprising is the rapid recovery in demand for luxury cars. The reduction in value added tax in Germany has helped sales. But China’s rapid recovery from the virus is the biggest factor. Mercedes China sales grew 23% year on year in the third quarter. The German carmaker’s sales team and prefabricated factories were considered a problem when investors’ biggest concern was the US-China trade war.

Sales of Mercedes sports cars, which typically generate higher profit margins, jumped nearly a quarter in the three months to September.

For the same reason, the pandemic has had only a moderate impact on the company’s huge car loan and lease. Earlier in the pandemic, Mercedes offered customers a break for payment and warned of a possible increase in credit losses. But most customers have returned to their normal payment schedule.

Shareholders will still wonder if the current performance is sustainable and what Daimler can achieve in a “normal” year. As the virus grows again in Europe and the United States, it will probably be some time before we know it. But Daimler and its German peers must be able to cope this winter. If only all European companies could say the same.

Graphics: Used with permission from Bloomberg Finance L.P.