The company is going through a bit of a rough time.
Mercedes may still be clinging onto its global sales lead when compared to BMW (though the Blue-White Roundel is catching up), but that doesn’t mean things are looking peachy for the automaker - or rather, for Mercedes’ parent company Daimler. More recently, Daimler has announced that it’s going to be cutting models and severing unnecessary ties in attempts to return to profitability.
That’s a status the company has fought to regain after losing billions due to fines and recalls associated with cheating on diesel emissions tests, with the Takata airbag recall, and with the financial crunch involved in investing heavily into electrification and autonomous vehicles at a time when the general auto market is experiencing a downturn. And now that Daimler has released its Q2 2019 sales reports, it’s plain to see that things are only starting to look worse for Mercedes.
That’s because its latest sales report details how the German automaker has had to further cut its profit forecast and set aside extra cash for, once again, the Takata airbag recall (automakers had to start footing the bill for the recall after Takata went bankrupt) and diesel emissions-related expenses. Moreover, Daimler is now warning that its second-quarter financial report will see numbers that are "significantly” lower than last year’s. In addition to the fines and necessary investment into new technologies, Daimler also cites other issues holding it back, like slower product ramp-ups and a sales slowdown in China due to concerns about the trade war.
This announcement makes it the fourth time Daimler has had to cut its forecast in just 13 months, reports Reuters.
Still, Mercedes is far from the only German automaker that’s hurting. BMW recently said it would also have lower than expected profits due to investments in future technologies, while Volkswagen claimed it would likely hit the lower end of its profit target. But despite all the negative news, Mercedes is still ahead of the German luxury pack.
"After a challenging first half of the year, Mercedes-Benz continues to be at the top of the premium segment,” said Britta Seeger, a member of Daimler’s Board of Management and the company’s Marketing and Sales head. "We are particularly pleased with the great popularity of the new compact models. In the third quarter, we anticipate sales momentum from the new SUVs with the star.”