Profits at Mercedes-Benz owner Daimler slump by E-5bn

Guardian UK ^ | Tuesday, February 11, 2020 | Jasper Jolly

[SunkenCiv]

Mercedes-Benz owner Daimler's profits slumped by almost two-thirds in 2019 as the legal costs of the "dieselgate" scandal and heavy investments in electric technology took their toll.

The German carmaker's net profit fell to €2.7bn (£2.3bn) for 2019, it announced on Tuesday, almost €5bn worse than the previous year's performance. It also slashed its dividend from €3.25 per share to only 90 cents to help preserve cash to plough into electric vehicle technology.

Daimler is carrying out swingeing cuts to its global workforce as it tries to save more than €1bn in costs. In November it said it would cut at least 10,000 jobs worldwide by the end of 2022, with redundancies concentrated among management roles...

Daimler booked legal costs of €5.4bn during 2019, including dieselgate costs. In September, Daimler was fined €870m by German prosecutors for failing to comply with emissions regulations, and it still faces further investigations in Germany and in the US, as well as civil lawsuits from customers...

The carmaker, which employs about 299,000 people worldwide, increased its spending on research and development by more than €500m in 2019, but has yet to launch its first mainstream electric vehicle, the Mercedes-Benz EQC electric SUV...

Adding to the uncertainty for the industry, Daimler and rivals also face an as-yet-unknown hit from the coronavirus outbreak, which has stopped production in many Chinese factories and is expected to weigh heavily on sales in the short term. Mercedes-Benz sold 707,000 cars in China last year.

[SunkenCiv]

The EQC 400 is an electric crossover with a 4.9-second 0-60 mph time... Daimler on Thursday said it plans to build 50,000 Mercedes EQC electric cars this year, denying a report in Manager Magazin that claimed it had been forced to pare back... its production target to 30,000 from about 60,000 because of a shortage of battery cells from LG Chem. Daimler wanted to sell around 25,000 EQC vehicles in 2019, but only managed to build around 7,000 for the same reason, Manager Magazin said... Carmakers face huge fines next year if they fail to cut their fleet emissions of carbon dioxide (CO2)... In 2018, average CO2 emissions in the European Union rose by 1.6% to 120.4 grams per km as customers abandoned diesel vehicles and gravitated towards buying bigger vehicles. Figures for 2019 are not yet available. Daimler's works council chief Michael Brecht told Manager Magazin that one of the reasons the company is struggling to meet battery demand is because Tesla bought Grohmann Engineering, a battery automation specialist hired by Mercedes-Benz to build up its own battery manufacturing capacity... The launch of the EQC has been hampered by production problems, including a recall last October after Daimler identified a potentially defective bolt in the differential. Germany's Auto Bild magazine on Thursday said the launch of the Mercedes EQC in North America has been postponed by a year, until 2021, because of the production problems.

Daimler denies battery supply problems, plans to build 50,000 EQCs this year { January 23, 2020

[SunkenCiv]

The Smart car brand co-founded by the German automaker and Swiss watch company Swatch in the mid-1990s has struggled in recent years, beset by high labor costs, the notoriously low margins on small economy cars, and markets that have increasingly favored sport utility vehicles and crossovers over compact cars. When it was first brought to the U.S. in 2008 by dealership mogul Roger Penske, the smart car promised tiny, fuel-efficient transportation for young urban Americans. It came at a time when fuel prices were going toward record highs, and the country was heading toward recession. But the vehicle also asked a lot of buyers. It was tiny: the only model sold in the U.S. had just two seats and very little trunk space. It got good gas mileage, but did not offer enough of an advantage over conventional compact cars to justify sacrificing the space and convenience of a conventional four-seat vehicle. U.S. sales in the car's first year were just under 25,000 units, but fell from there, bottoming out at a mere 1,276 in 2018. Sales in Europe were far higher at around 97,000 in 2018, but still not enough to make money for Smart parent Daimler, which some analysts estimate is losing around $500 million a year on the brand. In 2019, Daimler partnered with Chinese automaker Geely to produce electric Smart cars at a factory in China.

Mercedes-Benz's tiny car brand bets on China after failing in US | Robert Ferris | October 23, 2019

[Seruzawa]

Lol. Imagine driving a SmartCar on the interstate surrounded by rigs. They don’t even get that good mileage.

[TexasGator]

Protestors in Germany get judge to delay construction of Tesla factory.

[SunkenCiv]

http://www.google.com/search?q=gerber+kawasaki+tesla

http://www.google.com/search?q=gerber+kawasaki+tesla&source=lnms&tbm=vid

[SunkenCiv]

Spot on -- Smart Car fuel economy should be at least half again as high as it is.

[Jeff Chandler]

I can’t help but wonder if this rush to convert to coal-powered cars might just be a bit premature, like the ridiculous GM convert-petrol-engines-to diesel crap in the 80s?

If it were market driven I would have more confidence in it.

[SunkenCiv]

Protestors vs 12,000 jobs... hmm... a lot is riding on that plant. Tesla agreed up front to plant more trees than they were going to cut down, and the amount to be cleared is something like 200 acres. Musk wanted the plant in the EU, supposedly because the other possibility was post-Brexit Britain (and Tesla vehicles are an aspirational and popular brand in the UK). Obviously, the fact that VW, Daimler,and BMW are all in Germany was also a factor.

[Mariner]

This whole electric car thing will be perceived as Amsterdam tulips in 50 years.

[HamiltonJay]

I never understood the smart car... as you pointed out the gas mileage isn’t all that great given how much you give up for that car... Hell I had a 91 Fox GL with a 5 speed manual that got 40+ MPG highway. It was a great little car honestly, of course it only had .9l engine in it, inline 4... open the hood and half the engine compartment was empty.. but paired with the 5 speed I had no issues with acceleration etc.

I can see in Europe where streets and parking are at a premium this sort of tiny thing having an advantage, but I truly don’t see it in the states... The Tercel gets almost 40 highway... so sacrificing a hell of a lot for a smart for little benefit that I can see.

[Fungi]

I always called it the “Stupid Car”—built for people who thought they were smart but didn’t know they were stupid.

[TexasGator]

Makes one wonder who was paying the 0rotestors ...

[Wayne07]

A Honda CRX is much better at 52MP. Smart car was just poor engineering- all marketing, no substance.

[SunkenCiv]

I suspect that the use of natural gas to generate electricity (conventional plants, home generators as was tried in the 1970s in Italy, municipal-scale fuel cell installations) is going to head upward, bigtime, not least because the methane supply is literally 1000s of years' worth.

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• Hawaiian Electric ponders next move after governor opposes use of LNG: source
• Hawaii Gov. Ige reveals opposition to utility LNG import plans
• US Senate energy bill to speed LNG exports, clarify SPR sales limits
• Panama officials at OTC say expanded canal could be a gateway to LNG business
• India asks Qatar to cut LNG price by 60%

methane fuel cells:

Google

[SunkenCiv]

tesla plant in germany blocked over trees:

Google

(gee, I wonder who's financing the 'protests')

[HamiltonJay]

And they aren’t cheap either so no real mpg benefit and no purchase cost benefit.

I think they’re is a market for an inexpensive car and folks would compromise for it but the smart offered nothing tangible on either end

[SunkenCiv]

Last sold (the Del Sol version ) in 1992?

https://www.hagerty.com/articles-videos/articles/2019/10/03/a-clean-low-mile-honda-crx-si-costs-more-than-you-think

[Secret Agent Man]

How can one not comply with government if all it takes is turning off your power.

[gibsonguy]

The first time time my wife saw one in this country she started laughing hysterically at it the driver noticed and flipped her off. She was driving a CTS so could have fit the “smart” car in her trunk.

[HamiltonJay]

I instantly feel nervous anytime I see one of these on the interstate.. I know if they hit or get hit by anything at speed they are likely not to survive.

While the car cabin can take a pretty good hit, you can’t decelerate the human body as fast as you do in those small cars... no crumple zones ..so odds are even if you don’t have passenger compartment intrusion, you likely are going to die