Wednesday 22 January 2020 9:45 am

Profit halves at Mercedes-Benz owner Daimler as diesel scandal weighs

Daimler has issued its third profit warning for 2019 as costs related to the diesel scandal and production issues weighed on the German luxury carmaker. 

Damiler, which owns Mercedes-Benz, said this morning that its 2019 earnings before interest and tax are expected to slump to €5.6bn (£4.8bn), compared to €11.1bn the previous year.

These results do not include expenses of between €1.1 and €1.5bn for ongoing governmental and court proceedings related to diesel emissions issues with some Mercedes-Benz models, it said. 

Daimler shares were 0.95 per cent down in morning trading in Germany.

Daimler was forced to recall hundreds of thousands of Mercedes vehicles in October last year following an investigation by Germany’s road traffic regulator about whether their engines met European emissions standards. 

The company flagged an expected slump in 2019 earnings at the time, saying legal proceedings tied to emissions could result in additional expenditures.

The carmarker said today it expects return on sales at Mercedes-Benz cars to slump to four per cent for 2019, down from 7.8 per cent a year earlier. 

Return on sales is expected to fall to minus 15.9 per cent from plus 2.3 per cent at its vans division, and to 6.1 per cent from 7.2 per cent at its trucks unit.

Despite the lacklustre earnings figures, Damiler reported a ninth consecutive year of record sales of Mercedes-Benz passenger cars, with sales hitting 2.34 million vehicles. 

The figures put the carmaker in pole position to hold on to the title of biggest-selling premium car brand.