Fixing the tyre

29 July 2004 By Marianne Brun-Rovet

The global carmaker has exited Asia and fixed its US business. But it now needs to repair its luxury brand Mercedes. Daimler is taking the right steps to achieve this. But BMW is overtaking it and investors may make the switch.

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DaimlerChrysler on Thursday reported a fourfold increase in operating profit for the first half of 2004 as growth at its Chrysler and trucks units offset declining profit at the Mercedes car group.

Revenues at the GermanUS motor manufacturer rose 9% to E37.1bn. Operating profit rose to E2.1bn from E600m for the same period in 2003.

Daimler on Thursday confirmed that Eckhard Cordes, head of its trucks division, would be the new boss of its Mercedes car group.

Operating profits at the luxury car division, which last year provided more than half of Daimler's profit, fell to E703m from E861m in the same period last year.

BMW, owner of Mini and RollsRoyce, in July took pole position in the luxury car market for the first time in seven years, beating Mercedes in global sales for the first six months of 2004.

BMW outsold Mercedes, which includes the Smart and Maybach marques, by 6,183 cars in the first half.

The BMW brand also outsold MercedesBenz badged cars in May and June, although the Mercedes brand stayed ahead in the sixmonth period.

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