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GLE SUVs piling up at German airport as Mercedes faces supplier issues

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GLE SUVs and other models are being lined up in blocks, some of which are 15 cars abreast and seven deep, stretching down the tarmac at the former Ahlhorn airport near the city of Bremen.

Munich

DAIMLER AG is storing thousands of cars at a former military airport in northern Germany, as the Mercedes-Benz maker faces supplier issues that are delaying deliveries of its revamped GLE sport utility vehicle to customers.

GLE SUVs and other models were lined up in blocks, some of which were 15 cars abreast and seven deep, stretching down the tarmac at the former Ahlhorn airport near the city of Bremen. The SUVs, which start at about US$56,000, were made in the US for European customers.

The company has issued four profit warnings in little more than a year, most recently in July, when the company included a "slower model ramp-up" as one of the reasons for cutting its full-year guidance.

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At that time, chief executive Officer Ola Kallenius highlighted issues with the company's SUVs on a quarterly earnings call. Problems with a supplier in the US caused production bottlenecks, Mr Kallenius said at the time.

Daimler rose 2.1 per cent to 43.93 euros (S$67 million) at 9:49am in Frankfurt trading, trimming losses this year to 4.3 per cent. Carmakers are under pressure from slowing markets globally.

A Daimler spokeswoman detailed supplier problems after the simultaneous launch of the revamped GLE in several markets and a jump in output at the plant, leading to delays in getting the cars to customers. Demand for the vehicles remained strong, she said.

Mercedes uses storage sites around the world to temporarily park cars, such as when they await shipment. This includes the former Ahlhorn airport that's currently used for a range of Mercedes models, she said.

"The temporary storage of vehicles is a completely normal process," the spokeswoman said in an e-mailed statement.

This isn't the first time a German carmaker has had to park inventory at an airport. Volkswagen AG leased thousands of spots at Berlin's unfinished Brandenburg airport as the carmaker rushed to approve cars before the start of new emissions rules. BLOOMBERG