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Business

DaimlerChrysler Upbeat on Full-Year Prospects

The car maker’s chief executive says he is confident about the group’s earnings prospects in the current year, forecasting a return to profit for U.S. trucks unit Freightliner and higher-than-expected U.S. car sales.

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It looks like sunny skies for DaimlerChrysler earnings.

Jürgen Schrempp, chief executive of German-U.S. car giant DaimlerChrysler AG, is becoming increasingly confident about the group’s prospects in the current year.

“All in all, I can strongly underline the trend we set out in the first quarter,” Schrempp said in an interview with the dpa news agency, though he expressed some caution in light of economic and political uncertainties that continue to prevail.

In April, the DaimlerChrysler chief had said that the group this year would double the 1.35 billion euros operating profit that it obtained in 2001, and that it would have substantial additional earnings.

Schrempp said on Monday that the group’s troubled U.S. unit, Chrysler, would achieve the turnaround sooner than previously forecast. Developments were increasingly bearing out the forecast of a positive earnings result in the current business year.

DaimlerChrysler’s loss-making U.S. trucks unit Freightliner would “very clearly” enter profit during the course of the current business year, Schrempp said, while Japanese subsidiary Mitsubishi would again post a positive result in its current fiscal year.

But Schrempp said that the car market in Germany and in the rest of Europe remained “unsatisfactory”. Latest data shows that the market in May reached its weakest level since 1993. New car registrations last month totaled just 283,000, a drop of 14.2% from the year-ago period.

Only luxury-car maker BMW AG appears immune against the market slump. It was the sole German marque to sell more cars so far this year than in the year-ago period and to see a subtantial increase in its market share.

BMW increased its market share from 7.4% to 8.4%. And although DaimlerChrysler (+0.3% to 14.1%) and Ford managed to slightly increase their market share, their sales figures were down, while VW and Opel lost market share.

The situation on the Japanese car market also remained unsatisfactory, Schrempp said, but the U.S. market was making better progress. He said that DaimlerChrysler’s U.S. sales were expected to reach more than 16 million this year – an upward revision of the group’s previous forecast of 15–16 million cars.

Meanwhile DaimlerChrysler’s plans for the Chinese market are finally taking shape following lengthy negotiations. Schrempp said he would travel to China before the end of the year to sign contracts. Among the possible projects were the production of buses and transporters.

Together with its Chinese partners, DaimlerChrysler had obtained one of the few available production licenses. “We intend to make use of it now,” Schrempp said. He didn’t rule out car projects involving Mercedes-Benz in China at a later stage.

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