DAIMLER Truck reported a 27 per cent jump in third-quarter unit sales to nearly 135,000 as the chip shortage eased. However, it also warned that underinvestment in other parts of the supply chain was still causing shortages in everything, from nuts and bolts to tyres.
"Overall, the supply chain is somehow broken," chief financial officer Jochen Goetz said Friday (Nov 11) on an analyst call. "The market picked up super quickly .... The investments not taken a few years back mean that some smaller suppliers are not able to ramp up as fast as we need them to."
Hitting the truck and bus maker's 2025 target of reducing fixed costs by 15 per cent from 2019 levels was more challenging in today's inflationary environment, he said.
Incoming orders in the three months ended Sep 30 were down 18 per cent from 2021. Orders were also down 14 per cent this year so far.
The company had been restricting its acceptance of orders in Europe next year to have some room to manoeuvre, Goetz said, but in the US, books were open for the full year.
Higher pricing, favourable exchange rate effects, and a strong after-sale business pushed revenues up 47 per cent, and adjusted earnings before interest and taxes up 159 per cent, Friday's statement showed. This confirmed results released in an ad-hoc statement in late October.
Daimler, which was spun off from Mercedes-Benz last year, raised its outlook in October for full-year revenues to 50 billion to 52 billion euros (S$70.7 billion to S$73.5billion), from 48 billion to 50 billion euros. It said it expected earnings to be 5 per cent to 15 per cent above last year's level, rather than unchanged, as previously forecast.
The jump in earnings was highest in Europe at 316 per cent from the same quarter last year, compared with 111 per cent in North America, which is traditionally Daimler's strongest market.
In Asia, however, a depressed Chinese market prompted the company to lower its regional adjusted earnings margin last quarter to 1 per cent to 3 per cent, from 3 per cent to 5 per cent. Earnings fell 63 per cent, even as revenues and unit sales increased.
This was partly due to restrictions in Japan, which had increasing prices on existing orders, Goetz said.
Sales of Daimler Buses, which did not grow at all in 2021, are up 18 per cent this year so far. The company expects the coach market to bounce back in 2023. REUTERS