Daimler Loses 1 Billion Euros; Honda and Nissan Hang On
July 29, 2009
A recovery for the global automotive sector may be coming, but it's coming slowly. Japan's second- and third-largest automakers managed to stay in the black in the second quarter, but large European makers still bled.
Daimler AG lost about 1 billion euros in the second quarter, the company reported, although the decline beat analyst expectations. The maker of Mercedes-Benz passenger vehicles said total sales, which included commercial vehicles, plunged 31 percent in Q2 to 391,500 units and revenue was off by 25 percent.
The company also wrote off 397 euros million associated with the cost of letting go the 19.1 percent stake it held in the former Chrysler LLC with one-time partner Cerberus Capital Management LLC.
Daimler said it expects conditions to improve in the year's second half, but sent signals that recovery will be slow and that job cuts are likely between now and the end of the year.
France's PSA Peugeot Citroen, Europe's second-largest automaking conglomerate, declined nearly as much as Daimler, losing 962 million euros in the quarter. The company's performance likely was bolstered by ongoing "Cash for Clunkers" scrappage programs in many countries, which typically help makers of mainstream vehicles more than highline automakers.
Japan Stays Mostly in the Black
In Japan, Honda Motor Co. Ltd., the county's second-largest automaker, eked out a profit of about $79 million in the face of conditions that caused analysts to believe the company would assume a loss.
Honda sold 766,000 vehicles worldwide in the second quarter, a 20.4 percent decline attributed largely to cratering sales in the U.S.
Nissan Motor Co. Ltd. also managed a slight gain, posting an operating profit of about $122 million in the second quarter, but the company's net loss was $175 million.
Nissan sold a total of 723,000 vehicles in the second quarter, a drop of 23 percent.
Although stronger demand in Japan caused Honda to raise its global sales forecast for the entire year to a reported 3.295 million vehicles compared with the previous 3.1-million forecast, Nissan officials declined to project an increase in sales for the year. Profits at the two Japanese companies also were impacted by a strengthening yen, which reduces income from exports.
Toyota, Japan and the world's largest automaker, reports earnings on August 4.
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