Frankfurt – German car maker Daimler Back in the red By the end of 2019, the cost of developing electric cars and diesel emissions is bettered by the penalty.
The fall in profits, which Daimler had Careful about last month, Exemplifies the challenges facing the German car industry, which can be serious enough to push the country into recession. Vehicles are the country’s largest export, as well as an important part of national identity.
The quarterly loss of 11 million euros or $ 12 million was relatively small compared to gains of 1.6 billion in the fourth quarter of 2018, but it left Mercedes-Benz car and truck maker Daimler in a weak position as it faces economic consequences for Coronavirus in China.
Daimler and other craftsmen were forced to close their factories in China for longer than planned after the Lunar New Year, and the virus has kept people away from the showroom. On Monday, the company said it had begun to gradually increase production at its Chinese factory.
China has become a critical marketplace for all German workers and they are irrevocably suffering from the economic impact of the virus. Daimler sold nearly 700,000 Mercedes-Benz cars in China last year, more than double the sales in the United States.
Deutsche Bank economist Stefan Snyder said in a note to clients Tuesday that “the coronavirus provides substantial risk to the expected global recovery, as expected in the Chinese economy,” Mr Snyder added, adding that the recession in Germany earlier this year was “quite probable”.
Like its rival Volkswagen, Daimler also faces substantial charges from allegations that it programmed diesel vehicles. Cheat emission tests. Daimler said Tuesday that it spent $ 1.5 million during the quarter and $ 4 billion a year for legal activities and penalties in Europe, the United States and elsewhere.
The company has revealed that it is under investigation by the US Department of Justice, the Environmental Protection Agency and California regulators, as well as Europe and other jurisdictions.
The allegations have made Daimler protective, just as one of the biggest changes to the auto industry technology has occurred in over a century. Like other craftsmen, Daimler must invest billions in electric cars and autonomous driving or risk becoming irrelevant.
Daimler’s net profit for the full year fell by 5 percent to $ 2 billion. Sales grew 3 percent in 2019 to $ 173 billion.