Daimler posts 2-billion-euro loss in ‘challenging’ second quarter

Stuttgart (dpa) – The coronavirus crisis dragged Daimler deep into the red in the second quarter, with the German carmaker reporting on Thursday a net loss of around 2 billion euros (2.3 billion dollars).

This was an even worse result than last year, when the Stuttgart-based maker of Mercedes-Benz had to fork out billions for recalls linked to the emissions-rigging scandal and airbag defects.

Daimler also reported a 29-per-cent year-on-year plunge in revenues to 30.2 billion euros.

“Due to the unprecedented Covid-19 pandemic, we had to endure a challenging quarter,” said Daimler board chairman Ola Kaellenius.

However, he noted that strong demand for Mercedes-Benz passenger cars was among “the first signs of a sales recovery.”

Kaellenius warned that further cuts would be in store for the company, which is undergoing a major restructuring under his watch, while also pushing for progress in the areas of electrification and digitalization.

Daimler says it still hopes to post a profit in 2020, providing the economic situation continues to improve and the coronavirus pandemic doesn’t flare up again significantly in key markets.

Due to production stoppages at various plants and dealerships, around 480,800 vehicles from the Mercedes-Benz marque were sold in the second quarter, down by 30 per cent on the same quarter last year.

Across the entire Daimler group, unit sales fell by 34 per cent to 541,800.

Daimler had already published initial results last week, painting a better picture than expected given the heavy losses.

However, the carmaker is not confident that it can recover from its sales slump by the end of 2020, meaning that management will be tightening the purse strings even further this year.

Details on the austerity measures remain unclear.

Human resources executive Wilfried Porth said earlier this month that a previously announced target of 10,000-15,000 job cuts would not be enough. He also said that a personnel savings target of 1.4 billion euros was too low.

Sources from the company have suggested that there may be as many as 20,000 job cuts, with savings of 2 billion euros. Daimler has not yet officially confirmed those numbers.