Daimler expects up to 1.5bn-euro jump in 2019 costs for dieselgate

International product recalls and legal disputes linked to the diesel scandal have cost Daimler up to an additional 1.5 billion euros (1.7 billion dollars), the German carmaker said on Wednesday.

According to preliminary figures, Daimler is expected to post earnings before interest and taxes (EBIT) of 5.6 billion euros for 2019, plummeting by around half on the previous year, as the carmaker’s costly reckoning with emissions standards cheating grinds on.

“Not included therein are anticipated additional expenses for ongoing governmental and court proceedings and measures relating to Mercedes-Benz diesel vehicles in various regions and markets,” a statement from the company read.

These additional costs were expected to amount to 1.1 billion-1.5 billion euros for 2019, after the company had already set aside 1.6 billion euros for the diesel scandal last year.

The company is also facing rising costs in other areas, most notably in e-car production and the development of automated driving technology.

Board chairman Olla Kaellenius is pursuing a belt-tightening programme designed to save 1.4 billion euros by 2022, with over 10,000 job cuts planned. Investment is also to be capped.

The additional 2019 costs will impact Daimler’s Mercedes-Benz Cars and Mercedes-Benz Vans. The latter was already expected to post a negative return on sales of 15 per cent, a figure that has now been revised further down to minus 17 per cent.

Daimler is to present its full-year results on February 11.

Alongside Volkswagen, Daimler is among several carmakers that have been accused of violating pollution regulations and even manipulating exhaust systems to make emissions seem lower than they are.

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