German automaker Daimler AG has reported a 71 percent increase operating profit for the first quarter due largely to higher sales in China. Sales of the company’s S-class sedan have risen sharply in recent months.
In a statement released today, Daimler reported quarterly earnings of 2.03 billion euros before interest and taxes and a 17 percent increase in sales, to 24.7 billion euros. Profits matched the average estimate of a dozen industry analysts surveyed by Bloomberg. Net income for the first quarter nearly doubled to 1.18 billion euros.
Daimler is forecasting “significantly” higher this year and expects sales of its updated Mercedes-Benz C-class sedan and SLK roadster models to be robust despite supply chain interruptions caused by last month’s earthquake and tsunami in Japan.
Daimler credits the growing Chinese economy for much of its recent growth. Demand for premium vehicles from Mercedes-Benz, BMW AG and Volkswagen AG’s Audi division continues to grow in China and sales of Volkswagen’s Lamborghini brand in China may outpace U.S. sales for the first time in 2011.
China overtook the U.S. as the world’s largest automotive market in 2009.
Daimler expects to sell approximately 1.5 million vehicles by 2015 and to double its sales volume in China to 300,000 units.
Daimler’s Mercedes-Benz division plans to introduce a refreshed M-class SUV later this year.
Higher demand for heavy trucks in North America and Europe is also benefitting Daimler, which owns Japan-based Fuso and Kawasaki, and U.S.-based Freightliner. Daimler and London-based Rolls-Royce Group Plc are currently in talks to purchase Tognum AG. Daimler currently holds a 28.4 percent stake in the engine manufacturer.
In addition to premium autos, Daimler also plans to boost sales by introducing a new version of its B-class compact model later this year. The B-class compact is the first of four new small cars slated for release by Daimler.
The automaker is also constructing a new factory in Hungary to produce smaller, more fuel-efficient vehicles. The new models are designed to help Daimler meet increasingly stringent average fuel emissions standards and to grow sales to younger motorists.
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