Daimler’s Mercedes sustains margins & sees boost from E-Class

Bloomberg

Daimler AG maintained the profitability of its Mercedes-Benz Cars unit in the second quarter even as it spent money to introduce a new version of the E-Class sedan, a model it said will help boost returns the rest of the year.
Adjusted for special items, the return on sales was 10 percent at the division, which includes the Smart city car brand, compared with 10.6 percent a year earlier, the Stuttgart, Germany-based company said on Thursday in a statement.
Including one-time charges related to recalling cars with faulty Takata Corp. air bags, the profit margin dropped to 6.4 percent, compared with 10.5 percent last year.
“It’s good to see the adjusted return on sales in the cars division back in the double-digits with the E-Class launching,” said Sascha Gommel, a Frankfurt-based analyst at Commerzbank AG. “It’s a strong result across the board.”
Mercedes is expanding and rejuvenating its lineup with the aim of reclaiming the position of world’s biggest luxury-car maker from BMW, adding all-new models such as the GLC sport utility vehicle.
The carmaker said growth will speed up in the second half as customers buy a new version of the E-Class, a more profitable vehicle than the manufacturer’s smaller models.