Daimler Boss Expresses Brexit Concerns After Profit Drop

Daimler CEO Dieter Zetsche has issued a warning about the adverse effects of a no-deal Brexit after the German company reported a drop in profits.

Profits at Mercedes-Benz’s parent company fell by 28 per cent last year, from just over $12 billion to $8.67 billion. This came despite revenues within Daimler increasing by 2 per cent to $190 billion. During the same period, operating margins dropped by 23 per cent.

When quizzed about Brexit during Daimler’s annual press conference, Zetsche said the UK’s decision to leave the European Union will be one of the key factors in it recovering from a lackluster 2018, Autocar reports.

“Of course Brexit is one of the most important and crucial factors. It could put the world economy into an uncertain situation. The UK is the world’s fourth biggest market for us, and if a no-deal Brexit became a reality, the market in Great Britain would be very much adversely affected. Foreign exchange relations would also become unfavorably. It’s a big part of our risk portfolio.”

Zetsche also revealed that Daimler’s 2019 earnings will be impacted by a no-deal Brexit due to the company’s substantial investments in electric vehicles.

The first all-electric Mercedes-Benz to launch as part of Daimler’s EV push is the EQC. Revealed in production guise last year, the EQC will hit the production line from spring onwards.

It will soon be joined by a plethora of other hybrid and all-electric Mercedes models over the coming years as Mercedes wants to have at least one electrified model across its entire range by 2022, which translates to a whopping 130 electrified Mercedes and Smart.

This electric expansion of course requires big investments, and Daimler is certainly hoping that Brexit won’t hurt its financials this year.