Volkswagen and Daimler have posted a fall in their first three months profits for this year, the company’s have been affected by the continuous decline in car sales in Europe. Daimler have already warned that the company profits for 2013 will definitely be lower than last year, after a 60% decrease in the earnings of the company to 564 million euros for the first three months of the year. Volkswagen also saw their profits fall by 38% euros in the first three month period to 1.95 billion euros.
Sales for carmakers in Europe fell by 9.8% in March of this year and doesn’t seem to be showing any signs of turning around. Revenue for Daimler fell by 3% to 26.1 billion euros. Dieter Zetsche who is the chief executive of the company said that many markets indeed developed worse than had been originally anticipated. Daimler explained that expected earnings for the 2013 year, before tax and interest from their continued operations is going to be below the 8.12 billion euros of last year, a level that the company originally wished to reach or even exceed this year.
Daimler expect their Mercedes Brand to become the largest luxury carmarker in the World by 2020
Daimler have said that the company plan for their Mercedes brand to be able to overtake Volkswagen’s Audi and BMW as the largest luxury carmaker in the World by 2020. However sales for the company continued to lag behind the two rivals in the Chinese market, which is a seen as key if the company are to achieve these ambitions of growth. Volkswagen’s Audi sales rose last year in China by 30% to 405,838 cars, whilst BMW rocketed up by 40% to 326,444. Whilst sales for Daimler rose by just 4% to 206,150 vehicles.
Daimler, which is based in Stuttgart expressed this week that the company expects the United States and Chinese car markets to grow but went on to warn that European sales would continue to fall this year. The company explained, the German market is unable to detach itself from this development and is unfortunately espected to fall rather significantly in comparison to the previous year. Daimler also explained that due to the slow economy, the market for trucks is expected to fall by 5%.
Volkswagen faired better, though the company explain the negative effects the European market is having
Although Volkswagen did a little better in the first quarter of the year, the company still warned of the effects expected due to the slowdown of the market in Europe. Volkswagen explained that it is definitely bracing itself for the stiff competition they are having to face in the challenging environment. A spokesperson for Volkswagen explained that the company isn’t immune to the competition and the impact that this is having on business for the company. Revue was down by 1.6% to 46.57 billion euros, from 47,33 billion euros.