Mercedes accelerates out of its recession

Click to follow
The Independent Online
MERCEDES is back, an ebullient Helmut Werner, chief executive of the upmarket German car and truck maker, declared yesterday.

In a process begun in the second half of last year, a dynamically developing passenger car business pushed by new and revamped models and aggressive cost-cutting, was pulling the company out of the doldrums, he said.

Mercedes crashed to a group loss of DM1.2bn ( pounds 480m) on income from ordinary business activities in 1993 compared with a profit of DM849m in 1992.

During the first three months of this year car sales increased by 28 per cent to DM16.1bn compared with the same period last year.

'I am very confident that the passenger car division will generate a positive result again, but I have to add this is not due solely to increases in unit sales but also to further reductions in costs,' Mr Werner said.

Commercial vehicles, which account for 41 per cent of Mercedes' group business volume, continue to perform extremely weakly. Because of this Mr Werner was very cautious about an overall earnings prognosis, saying only that the trend would certainly be upwards.

Mr Werner said Mercedes recorded above-average growth rates in all its important car markets in the first quarter of 1994. In the still fragile domestic market new car registrations increased by 41 per cent, while in western Europe excluding Germany they rose by 46 per cent. Sales in both the US and Japan increased by 30 per cent.

Boosted mainly by the success of the smaller C-class model, Mercedes expected to sell more than 570,000 cars this year, up from 508,000 in 1993, said Mr Werner.

He spoke of a 'mood of a new beginning' in the company, underpinned by the rationalisation of production procedures, a focus of employing capital more efficiently and plans for a revolutionary extension of Mercedes' traditional car range into other sectors.