Daimler AG Chief Executive Officer Dieter Zetsche played down the threat to the global automotive business, telling shareholders it was more resilient than analysts have suggested and saying the German automaker is on the verge of a very strong year.
He also dismissed the idea that Daimler could be caught up in the fallout from the Volkswagen emission cheating scandal. While Daimler and its principle subsidiary, Mercedes-Benz cars, have been accused of evading emission regulations in North American and Europe, Zetsche said the company is confident it can demonstrate it has abided by all of the regulations.
“Let’s begin with the fact that for many years, experts have predicted the end of growth – especially in the automotive industry,” Zetsche told shareholders.
“They’ve been saying that the boom in China in particular is over,” he said. “But in fact, it’s estimated that 80 million new vehicles will be sold worldwide this year. In China alone, the market could expand by 2.5 million automobiles.”
In addition, Daimler is growing in markets that were previously considered saturated, Zetsche said.
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“One example of that is Europe, where we sold 12% more cars in the first quarter than in the same period in 2015. Our marketshare has been growing steadily for the past two-year,” moving the company closer to the goal of moving ahead its German rivals, Audi and BMW, before the end of the decade, he said.
Zetsche said Mercedes-Benz is the world’s fastest growing premium brand and to make sure this winning streak continues, the company is maintaining the fast pace of its model offensive this year with plans to introduce 16 new or updated models.
Following record global sales in the first quarter, Daimler now expects to achieve further significant growth in total unit sale once again in 2016.
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“All of the signs indicate that 2016 will also be a good year for Daimler,” Zetsche said.
“As in previous years, we expect the second half of the year to be significantly better than the first – with the increasing availability of the new E-Class and more attractive hedging rates.” Daimler assumes that earnings before interest and taxes or EBIT will increase slightly in 2016.
The performance of Mercedes-Benz cars and Mercedes-Benz vans should be slightly above the prior-year level.
The company’s bus, truck and financial services units are all expected to finish with better results compared with 2015. However, the rate of growth is likely to be rather lower than in 2015, which featured exceptional dynamism, he said.
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The prediction of a better year ahead came on the heels of the company, approving the distribution of a record annual dividend of 3.25 euros to shareholders. However, the company has no plans for a share buyback, which could potentially lift the price of the German automaker’s shares, Daimler executives said during the meeting.
