Daimler chief executive Ola Källenius hailed a “remarkable” recovery in the Chinese market after the owner of Mercedes-Benz notched up a sixth straight month of double-digit sales growth in Asia’s largest economy.
China has been a rare bright spot for a global car industry hit hard by the disruption unleashed as governments’ attempts to contain the spread of Covid-19.
Daimler’s Mercedes-Benz brand sold a record 24 per cent more vehicles in China in the quarter to the end of September than in the same period in 2019, and the company has registered “double-digit growth” in the months since, Mr Källenius told the Financial Times.
With global car sales forecast to shrink by at least a fifth in 2020, the rebound in China is a much-needed fillip to German manufacturers who are struggling to pay for the development of electric cars.
Daimler’s rival BMW, which counts China as its largest single market, has also benefited from a record boom that sent the group’s third-quarter sales in the country up 31 per cent higher from a year earlier.
Sales at Volkswagen group, which includes premium brands such as Audi and Porsche, have dropped by just over 9 per cent in China for the year to the end of October, compared with a 25 per cent decline in western Europe.
“The V shaped recovery in China was remarkable,” Mr Källenius said.
The resurgent market helped Daimler record a pre-tax profit of €3.1bn for the third quarter, and free cash flow of more than €5bn.
While he cautioned that some of the rebound was owing to pent-up demand from February and March, when the pandemic savaged the Chinese economy, the Swedish executive said he was confident that Daimler was “looking at a growth momentum also going into 2021” and remains “bullish on China”.
Daimler faces a daunting bill to pay for the transition to electric car technology. Mr Källenius has vowed to slash a fifth of Daimler’s fixed costs over the next four years and focus more on its brands in profitable high-end segments, including Maybach, AMG and G.
The company has also been racing to meet strict EU-mandated fleet-wide emissions targets for 2020, in order to avoid fines from Brussels.
The rebound in China, Daimler’s largest and most profitable market, has fuelled a sharp rally in the group’s share price. The stock is now almost 15 per cent higher than it was at the start of the year, despite the high costs of the Stuttgart-based group’s late foray into electric vehicles.
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