Daimler AG said its financial targets have become harder to achieve after a tough start to the year, forcing the auto manufacturer to step up efforts to drive down costs.
The Mercedes-Benz maker’s first-quarter profit slumped 16 percent after a decline in deliveries combined with the rising cost of developing new models. While earnings met analyst estimates, Chief Executive Officer Dieter Zetsche said the results fell well short of the company’s expectations.
“Achieving the financial targets for 2019 has not become easier since the first quarter,” Zetsche said Friday in a statement.
The manufacturer, like other carmakers, is battling slower sales in the U.S. and Europe while shouldering record spending on a range of new electric vehicles. Also on Friday, Renault SA reported a 4.8 percent drop in first-quarter revenue, while earlier in the week Nissan Motor Co. said it would miss its annual profit goal. Ford Motor Co. meanwhile surged past expectations.
Daimler in February already vowed to cut costs to shore up falling profits, with a 5.6 percent drop in Mercedes-Benz deliveries through March exacerbating pressures. The company on Friday gave scant fresh detail about how to reverse a profitability decline in the main cars unit to 6.1 percent from 9 percent a year ago. While Mercedes-Benz sales held up in China, the world’s largest market is still mired in a slump.