Mercedes-Benz sales plunge: German car makers face grim outlook

FRANKFURT - Group sales at Mercedes-Benz fell 24 per cent in the first quarter of the year, the Daimler- Benz subsidiary said yesterday, writes John Eisenhammer.

Helmut Werner, who takes over as chairman in May, said car sales had plunged 30 per cent in the first three months of 1993, while commercial vehicle sales dropped 16 per cent compared with a year ago. He said group new orders were down as much as 30 per cent for cars in the first quarter, and 20 per cent for trucks.

Werner Niefer, Mercedes' outgoing chairman, said he did not expect a significant upturn in business before the year's end. He said there would be no improvement in net profit in the coming months, even if business should pick up slightly. Mercedes reported in its 1992 annual report that group pre- tax profit dropped to DM2.6bn from DM4.3bn in 1991.

Mr Niefer said Mercedes had been forced to introduce significant short- time working, which is expected to continue in commercial vehicles until June and in car production until May. The company's workforce is to be cut from 222,500 to 204,000 by the end of 1993. Mercedes is pinning most of its hopes for a more robust performance in the second half of the year on its new compact C-class car, which is to go on sale throughout Europe in June.

The lack of a new vehicle in the smaller category of luxury cars - the current Mercedes 190 is over 10 years old - was a key factor behind Mercedes falling in 1992 for the first time in car sales behind its arch-rival, BMW. The extent of the boost provided by the new C-class will be dampened, however, by the hugely depressed domestic and European car market. The German Automobile Industry Federation said: 'The development of incoming orders does not lead to the conclusion that there is a far-reaching recovery in automobile demand'. German car production in the first quarter of 1993 was down 23 per cent at 1.01 million units on the same period last year. Exports were 18 per cent lower at 526,300.