Daimler defies pandemic to post $4.8bn profit and predicts growth
Ryan Thompson in Frankfurt
Despite a difficult year for auto manufacturers, Daimler, the parent company of Mercedes Benz, defied expectations and posted a $4.8 billion profit for 2020.
It's the latest European auto company, following Jaguar and Volkswagen, to report positive earnings for the previous year as many corporations struggle to stay out of the red.
Analysts had anticipated that coronavirus lockdowns, production delays and a shortage of semiconductor chips would hurt the world's oldest car company.
"Very quickly, we changed the way we work to keep the business going," CEO Ola Kallenius told investors on Thursday.
Despite the profit, global sales of Daimler vehicles, which also include Smart and Mitsubishi, dropped 11 percent. European dealerships reported the biggest fluctuation, as pandemic restrictions hampered their business for many weeks.
Double-digit growth in China helped offset lost revenue from Europe and the Americas. Chinese consumers have become increasingly important for Mercedes and other luxury German auto brands.
When restrictions were lifted in Chinese mainland, consumers flocked to car dealerships.
"This looked like a pretty awful situation for 2020, but China immediately came out of this crisis in the second and third quarter," said auto analyst Juergen Pieper, of Metzler Capital Markets. "Today it looks to be the best of all markets again."
Daimler told investors that it expects growth in 2021, with global sales and revenues rising "significantly," despite the impact of the pandemic.
"We are confident that we can maintain positive momentum if current market conditions prevail," Kallenius said in an earnings statement.
The group also announced it would spin off its truck division and rename itself Mercedes-Benz after its top-selling luxury brand.
Shares were up on German markets by more than 2 percent on Thursday on the news.