Mercedes’s Zetsche has set dual goals for Mercedes to retake the lead in global premium-car deliveries by the end of the decade from BMW and Audi, currently the top two brands, and to generate an Ebit margin from automaking of 10 percent of revenue.
“Daimler is delivering,” said Frank Biller, an analyst at LBBW in Stuttgart, Germany. “The new models currently allow Mercedes to close the gap to the competition. We see Audi, BMW and Mercedes approximately at eye-level” over the long term. Other analysts were skeptical that Daimler will reach or maintain its 10 percent margin target.
“If all markets perform well and the product is good, Daimler can reach the 10 percent even without a new savings program,” said Arndt Ellinghorst, London-based analyst at investment researchers ISI Group. “Whether the margin would be sustainable is a different matter.”
Max Warburton, an analyst at Sanford C. Bernstein, said Mercedes is still a long way from the target. “We remain of the view” that Mercedes “will struggle to close the gap fully with BMW and Audi,” he wrote in a note to clients. Zetsche’s growth strategy includes bringing out 30 new models and reducing spending by 2 billion euros in the two years through 2014. Daimler stopped giving a deadline for the profitability goal in 2012 after missing earlier dates.
“Generally, Mercedes should be able to reach a higher margin level than BMW,” Daniel Schwarz, a Frankfurt-based analyst at Commerzbank, said before the figures were published. “Mercedes can charge higher prices than BMW and Audi and they are making improvements on the cost side.” The Mercedes marque fell behind BMW’s namesake brand in deliveries in 2005, and Audi overtook it in 2011.
