Daimler, a Germany-based automobile company which manufactures Mercedes-Benz series of cars, reduced profit expectations for 2019 by millions. This decision was announced on Sunday and was caused due to the current diesel emissions scam that has created several concerns in Germany’s automobile industry.
Daimler stated that current governmental measures and proceedings connected to diesel-fueled vehicles would impact its Q2 earnings. It also expects expenses to increase in relation to these proceedings. Daimler stated that its 2019 profit levels would be somewhere around last year’s profit levels as well. Monday saw the carmaker’s shares drop by over 3.6%. Since a high during April, the company’s stock has fallen by over 20%. The current economic climate in Germany is not favorable at all for these automakers.
German automobile manufacturers have been under intense scrutiny for years regarding diesel vehicle emissions that are considered harmful. This was a result of Volkswagen, another Germany-based automobile manufacturer admitting to rigging diesel engines of its vehicles to enable cheating on various emissions tests.
This revelation triggered loss of confidence among regulators and consumers in diesel tech and then cost VW billion of USD in settlements, recalls and legal penalties. April saw the EC state that VW, BMW, and Daimler had violated antitrust rules. They colluded to delay introduction of 2 emissions cleaning-based systems during 2006-2014. This was revealed to shock across the world.
Daimler had stated that it is cooperating in all aspects with the European Commission. Most likely, it will not have to pay fines.
Daimler and other automakers are currently investing big bucks into future R&D as various tech upstarts and companies like Tesla are investing money into autonomous and electric cars. It is expected that Daimler will offer over 130 hybrid and electric models by 2022. It also has plans to launch trucks, electric vans, and buses.