Fewer vehicles with Mercedes-Benz's trademark three-pointed star are finding buyers in China and Europe's increasingly weak new car market, a downward trend that has forced the automaker's German parent to revise its profit forecast for the division.
Daimler CEO Dieter Zetsche admits that Mercedes-Benz is "gearing up for a challenging environment" and that the division's earnings before interest and tax will be below last year's $6.8 billion.
Previously, Daimler had indicated that the company's Mercedes-Benz passenger car division would post similar earnings to 2011, but Zetsche said that the automaker is expecting a week second half of the year. Overall, Daimler anticipates the rest of its group business to be strong enough to keep its earnings about the same as lat year's 9 billion euros.
While auto industry sales in China have essentially flat-lined after years of growth, Europe is perhaps the larger concern. Ongoing economic issues have eaten into new car sales across the spectrum as economic uncertainty is keeping buyers out of new car showrooms.