Daimler Accelerates Electric Car Plans

Germany’s Daimler has accelerated development of premium electric cars, Chief Executive Dieter Zetsche said, adding he saw the vehicle segment gaining market share.

“We are adjusting our planning in this field,” he told analysts on Thursday during a call on second-quarter results.

His remarks to analysts come as rivals Tesla and Volkswagen’s  luxury brand Audi prepare their own push to ramp up premium electric cars.

The carmaker will reveal more about its plans for electric cars at the Paris motor show in October, he said.

Daimler reiterated it will increase spending in research and development, which it expects to be “significantly above” last year’s 6.6 billion euros, which was already a step up from 5.7 billion invested in 2014.

The Stuttgart-based company which presented its second-quarter results on Thursday said the return on sales at Mercedes-Benz Cars had fallen to 6.4 percent, from 10.5 percent in the year-earlier period.

Excluding one-off items like a charge to pay for a recall of vehicles equipped with potentially faulty Takata airbags, the division’s return on sales would have been 10 percent, Daimler said.

Investments to roll out new models, like the Mercedes E-Class, dented the margin. But Zetsche believes an aggressive product push will help Mercedes-Benz overtake BMW to become the biggest selling luxury carmaker by sales.

Last year, BMW retained the title of largest premium auto maker posting sales of 1.91 million BMW branded passenger cars while Mercedes sales sold 1.87 million cars, compared with a 3.6 percent jump to 1.80 luxury vehicles sold by Audi.

Second-quarter group adjusted earnings before interest and taxes rose 5.6 percent to 3.97 billion euros ($4.37 billion), driven by gains in the vans and bus units, Daimler said. Revenue rose 2.9 percent to 38.6 billion euros. Adjusted Ebit at the Mercedes-Benz Cars unit fell 1.1 percent to 2.21 billion euros. The company stuck with a forecast of slightly higher adjusted Ebit for both Mercedes-Benz and the group this year.

A 605 million euros one-off gain from the sale of stakes in Renault and Nissan failed to offset a charge of 400 million euros related to antitrust proceedings, a 244 million euros impairment on shares in BAIC Motor, and 241 million euros in losses from currency transactions.

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