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Annual General Meeting: Daimler Truck Loses Height: Daimler Truck Remains Optimistic Despite Economic Worries – Price Rise Due to Cost Rising | news

Sales of the world leader in the heavy truck market are expected to increase by more than ten percent to 520,000 vehicles, the DAX Group confirmed Wednesday during its first general meeting as an independent company. In terms of sales, the Swabians are still aiming for an increase of up to a quarter from 48 to 50 billion euros. Adjusted return on sales is expected to increase by at least one percentage point, from seven to nine percent. “So we are going to the rest of the year with optimism and confidence,” said CEO Martin Daum, according to the text of the speech at the virtual shareholders’ meeting.

Economic risks have increased in recent weeks, so much so that many fear a further downturn in the global economy, Daum explained. “And such a decline, the concern is, would directly affect us as a cyclical industry.” But thanks to investments in new commercial vehicles postponed due to the Corona crisis, Daimler Truck is in an exceptional situation that could cushion a slight downturn. Many customers now urgently need to renew their fleets. “We are therefore not seeing any cancellations.” Furthermore, the truck manufacturer can absorb the increase in production costs with higher prices. The outlook takes into account the currently known effects of the war in Ukraine and the gradual decrease in the shortage of semiconductors.

In June, both the Organization for Economic Co-operation and Development (OECD) and the World Bank significantly reduced their growth expectations for the global economy. The OECD lowered its forecast of global economic growth in 2022 from 4.5% to 3%, the World Bank from 4.1% to 2.9%.

Daimler Truck has been independent and publicly traded since December following the spin-off of the larger sister company of Mercedes-Benz passenger cars. The Stuttgart group has been listed on the main DAX index since March. The main shareholder is the Mercedes-Benz Group with nearly 35 percent, followed by Chinese automakers and Daimler partners BAIC and Geely via its owner Li Shufu, each with a good six percent.

Daimler Truck installs fewer chips in trucks

Due to a permanent shortage, Daimler Truck is reducing the number of chips in its trucks. The manufacturer also relies on other suppliers for these electronic components, CFO Jochen Goetz said at the online general meeting in Stuttgart on Wednesday. “Disruptions in supply chains, particularly in semiconductors, are weighing on our business.”

The situation with the chips is expected to improve in the second half of the year, Goetz said after questions from shareholders. The bottleneck affects the entire industry and had also in the past caused Daimler Trucks to build up production inventories due to a lack of components.

Daimler Truck raises prices due to rising costs

Daimler Trucks is struggling with rising raw material and energy costs. That’s why the truck and bus manufacturer is raising prices, CFO Jochen Goetz said at the online general meeting in Stuttgart on Wednesday. “We expect continuous headwinds for the whole of 2022”.

Regardless of economic worries and the war in Ukraine, the truck manufacturer is sticking to its goal of increasing sales by up to 50 billion euros this year. Last year it was around 40 billion euros. The global truck order situation is excellent, CEO Martin Daum said at the shareholders’ meeting.

As a result of a permanent shortage, the number of chips in trucks is reduced. Other suppliers of these electronic components also come into play, as Goetz explained. “Disruptions in supply chains, particularly in semiconductors, are weighing on our business.”

The situation with the chips is expected to improve in the second half of the year, Goetz said after questions from shareholders. The bottleneck affects the entire industry and had also in the past caused Daimler Trucks to build up production inventories due to a lack of components.

Daum said last year that production at the large truck plant in Wörth in southern Palatinate was suspended for a few days due to the bottleneck. Production at the plant, which employs around 10,000 people, is currently progressing according to plan.

The now independent producer held its first public general meeting. Last December, the then Daimler Group, which now operates under the name of Mercedes-Benz (Mercedes-Benz Group (formerly Daimler)), spun off its large commercial vehicle business. Daimler Truck, with around 100,000 employees worldwide, is one of the largest truck and bus manufacturers. Shares of Daimler Truck temporarily fell 3.35% to € 62.02 via XETRA on Wednesday.

Frankfurt (Reuters) / STUTTGART (dpa-AFX)

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