German luxury car manufacturer Daimler is predicting a significant rise in operating profit this year after a surge in sales of Mercedes-Benz luxury cars and sports utility vehicles. As Sara Hemrajani reports, a product offensive is also helping French carmaker PSA.
On the fast track to success. Record quarterly sales of Mercedes passenger cars is seeing Daimler race ahead. The German automaker is lifting its forecasts for the year, expecting a surge in revenue and profits. Soundbite: Michael Hewson, Market Analyst, CMC Markets, saying (English): "Daimler has shown good growth in all of its markets. The Mercedes E-Class, in particular, has sold well pretty much across all its markets. China sales are up 43 percent, double digit sales in markets like Canada and Mexico. So certainly I think marque brands tend to do well in any economic upturn." Buyers have been splashing out on new Peugeot and Citroen models as well. Parent company PSA says revenue jumped nearly 5 percent between January and March. It's benefitting from a better 'product mix', previous cost-cutting measures and a stronger European market. Soundbite: Michael Hewson, Market Analyst, CMC Markets, saying (English): "Certainly I think if you look at the new car registration numbers - in the EU it's at a one year high, in the UK they're still fairly elevated. And ultimately I think it's much cheaper now to actually get finance on a car that ultimately that can only be good for carmakers going forward." But Hyundai hasn't been sharing that good fortune. It posted a 21 percent drop in quarterly profit - dragged down by a U.S. recall and a sales dip in China due to political tensions between Seoul and Beijing.