Daimler Trucks production below demand due to chip shortage - CEO
Reuters
Published Oct 05, 2021 04:33AM ET
Updated Oct 05, 2021 05:31AM ET
BERLIN (Reuters) -Daimler Trucks CEO Martin Daum said the truckmaker, set to spin-off from Daimler (OTC:DDAIF) in December, will continue to sell fewer vehicles than it could have in the coming year as chip shortages hamper production.
"We will certainly be delivering less than we could have sold, and that also applies to next year," he said at a roundtable with journalists on Tuesday, echoing recent warnings from competitors like Traton that profits could fall in the second half due to supply chain issues.
"It's a fight over every chip," Daum said.
While passenger vehicle producers such as BMW or Daimler can increase prices to offset chip losses, truckmakers do not have this flexibility, he said.
Still, the company has committed to a 15% fixed-cost reduction from 2019 levels by 2025, and cuts are "well underway", he said. A concrete update will be provided at the company's Capital Markets Day on Nov. 11.
Daimler Trucks & Buses, which prior to the pandemic reaped annual profits of around 2 billion euros ($2.3 billion), is set to become the world's largest truckmaker once the spin-off from Daimler - approved by shareholders on Friday - is complete.
Between chip troubles and lacking infrastructure for the hydrogen and electric trucks it is betting on for 60% of its revenues by 2030, the newly spun-off firm is entering a challenging market.
Its latest results show profit margins lagging behind competitors such as Traton's Scania and Volvo Group's Volvo Trucks.
The truckmaker will start production of its first electric truck series, eActros, in Germany this week. High production costs mean the price is roughly three times that of a diesel equivalent.
"As battery prices fall, we will certainly pass this on to our clients. But how quickly this will happen, I can't say," Daum said, adding that CO2 pricing was urgently needed to disincentivise the production of fossil fuel-burning cars.
($1 = 0.8619 euros)
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.