Daimler AG said on Thursday it expected to report a near 70% plunge in a key first-quarter earnings figure and 2020 industrial free cash flow to fall, as customers shunned Mercedes-Benz car showrooms amid the novel coronavirus pandemic.
The forecast provides further evidence of the financial damage inflicted by the pandemic on the auto market, as global vehicle sales and production get pummelled by tight restrictions governments have had to impose on business activity and the movement of people to control the spread of the virus.
Earlier this month, rival luxury car maker BMW reported a 20.6% drop in first-quarter sales and said it was expecting a further decline in global demand.
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Overall passenger car sales tumbled by more than 50% in Europe's major markets last month, with Italy - hit particularly hard by the pandemic - reporting the biggest drop of 85.4%, according to data from the European Auto Industry Association (ACEA).
Daimler reported preliminary adjusted first-quarter earnings before interest and tax (EBIT) of 719 million euros ($777.10 million), a 68.9% fall from a year earlier. It also expects total unit sales and revenue for 2020 to be lower compared to last year.
Preliminary adjusted EBIT for Mercedes-Benz cars & vans fell more than 56% to 603 million euros.
(Also read: Daimler Mercedes salutes essential workers battling amidst Covid-19 pandemic)
Across the Atlantic, Ford Motor Co estimated a loss of about $2 billion for the first quarter, and had to raise $8 billion from corporate debt investors to shore up its cash reserves.
Meanwhile, Germany, Europe's largest economy, has begun to ease some restrictions, allowing carmakers to restart production.
Mercedes-Benz, which had suspended most of its production in Europe, said on Wednesday it was ramping up engine production at its plant in Bad Cannstatt, Stuttgart as it gradually reopens plants on the continent using lessons learned from resuming production at its plant in China.
This story has been published from a wire agency feed without modifications to the text.