Benz cars confirms return-on-sales target of 10 percent

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PR Newswire | 28 May, 2010
STUTTGART (Germany and Beijing): Daimler AG sees further growth opportunities for Mercedes-Benz Cars in terms of unit sales, revenue and earnings in the coming years. Daimler has set itself the goal of delivering sustainable profits from operating activities at Mercedes-Benz Cars.

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Meeting with investors and analysts in Beijing, Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, stated: "From today's perspective, assuming there is no further downturn of the world economy, we expect Mercedes-Benz Cars to achieve its targeted return on sales of 10 percent in the second half of 2012 and to maintain it as of full-year 2013."

The Chairman of the Board of Management sees the positive business development of Mercedes-Benz Cars in recent months as the result of the sustainable progress made with the "Gofor10" efficiency program, the strong product portfolio and the good momentum of the brand with the three-pointed star. Another factor is that Daimler did its strategic homework during the financial and economic crisis, laying the foundations for future success.

These efforts will also be reflected by the results of the second quarter of 2010. Zetsche: "From today's perspective, we expect Mercedes-Benz Cars' EBIT in the second quarter of this year to be higher than in the first quarter." The division's EBIT for the first quarter of 2010 amounted to euro 806 million.

In April 2010, Mercedes-Benz Cars already sold 12 percent more vehicles than in the same month of last year, and further substantial growth is also indicated for May and June. There are additional significant advantages in the second quarter from better pricing, a better product mix and the optimized cost structure. Return on sales in the second quarter could therefore also be higher than the first quarter's seven percent. Mercedes-Benz Cars' second-quarter production output of well over 300,000 vehicles will be close to the volumes achieved before the start of the financial and economic crisis.

According to Zetsche, the half-year results cannot be annualized for full-year 2010 because in the second half of this year, Mercedes-Benz Cars will spend more on CO2-related research and development and will have higher capital expenditure for new vehicle models, with a corresponding impact on earnings. "Nonetheless, I can say that Mercedes-Benz Cars' EBIT for the year 2010 will be at the upper end of our forecast of euro 2.5 billion to euro 3 billion," stated Zetsche in Beijing.

Zetsche believes China is increasingly becoming the center of gravity of the automotive industry. "China is becoming more and more important also for Daimler. This year, China has already become Mercedes-Benz Cars' third-largest sales market after Germany and the United States." The division anticipates sales of more than 100,000 vehicles in China this year (2009: 67,000). China is already the biggest market worldwide for the Mercedes-Benz S-Class and R-Class model series.

Due to the increasing importance of the Chinese market, Daimler has now for the first time organized a company event for investors and analysts in Beijing.

Further information on Daimler is available on the internet at: http://media.daimler.com

This document contains forward-looking statements that reflect our current views about future events. The words "anticipate," "assume," "believe," "estimate," "expect," "intend," "may," "plan," "project," "should" and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including a lack of further improvement or a renewed deterioration of global economic conditions, in particular a renewed decline of consumer demand and investment activity in Western Europe or the United States, or a downturn in major Asian economies; a continuation or worsening of the tense situation in the credit and financial markets, which could result in a renewed increase in borrowing costs or limit our funding flexibility; changes in currency exchange rates or interest rates; the ability to continue to offer fuel-efficient and environmentally friendly products; a permanent shift in consumer preference towards smaller, lower margin vehicles; the introduction of competing, fuel-efficient products and the possible lack of acceptance of our products or services, which may limit our ability to adequately utilize our production capacities or raise prices; price increases in fuel, raw materials and precious metals; disruption of production due to shortages of materials, labor strikes, or supplier insolvencies; a further decline in resale prices of used vehicles; the effective implementation of cost-reduction and efficiency-optimization programs at all of our segments, including the repositioning of our truck activities in the NAFTA region and in Asia; the business outlook of companies in which we hold an equity interest, most notably EADS; the successful implementation of the strategic cooperation with Renault, changes in laws, regulations and government policies, particularly those relating to vehicle emissions, fuel economy and safety; the resolution of pending governmental investigations and the outcome of pending or threatened future legal proceedings; and other risks and uncertainties, some of which we describe under the heading "Risk Report" in Daimler's most recent Annual Report and under the headings "Risk Factors" and "Legal Proceedings" in Daimler's most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission. If any of these risks and uncertainties materialize, or if the assumptions underlying any of our forward-looking statements prove incorrect, then our actual results may be materially different from those we express or imply by such statements. We do not intend or assume any obligation to update these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made.