Salem Radio Network News Monday, August 2, 2021

Business

Unrelenting chip shortage could dent Daimler car 2021 sales

By Nick Carey

LONDON (Reuters) -A global shortage of semiconductor chips will dent car sales in the second half of 2021, Mercedes-Benz maker Daimler AG said on Wednesday, but left unchanged its profit margin outlook for the year.

Daimler is among the major carmakers that have had to cut back production this year because of the shortage spurred by the coronavirus pandemic.

The company said that its visibility into how the chip supply situation will develop is currently low.

“Improving supply visibility is a top priority for us,” CEO Ola K√§llenius said on a conference call with analysts and investors.

The shortage comes as demand for cars has spiked during the global economy’s recovery from the ravages of COVID-19, sending up prices of both new and used vehicles as inventories shrink.

Mercedes-Benz car sales in the second quarter jumped 27%, with a 54% jump in Europe, Daimler’s second market after China.

After soaring in late 2020 and the first quarter, Mercedes-Benz sales in China posted a modest gain of 5.8% in the second quarter.

The company said it now expects full-year car sales to be in line with 2020 levels. Previously the German carmaker had said it expected car unit sales this year to be significantly above last year’s.

Daimler also said that 2021 adjusted profit margins at its truck and bus division would be between 6% and 7%, below its previous forecast of a range from 6% to 8%.

The company confirmed on Wednesday that second-quarter adjusted group earnings before interest and tax (EBIT) were 5.42 billion euros ($6.38 billion), with car and truck divisions beating analyst targets.

Daimler reported preliminary results last week.

($1=0.8495 euros)

(Reporting by Nick Carey; editing by Clarence Fernandez and Jason Neely)

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