STUTTGART -- Daimler's fourth-quarter operating profit fell 22 percent as trade wars and ballooning costs for developing electric and self-driving cars hit profits at the Mercedes-Benz Cars, the company said on Wednesday.
Daimler said the return on sales at Mercedes-Benz Cars fell to 7.3 percent in the fourth quarter from 9.5 percent in the year-earlier period.
For 2019, Mercedes-Benz Cars, which makes the Mercedes and Smart brands, expects to achieve a return on sales of between 6 percent and 8 percent and a return on sales of between 5 percent and 7 percent for Mercedes Vans, Daimler said.
"With our guidance for Mercedes-Benz Cars and Mercedes-Benz Vans we are below our long-term target margins. We cannot be satisfied with this. Our goal is to return to our target margin corridor of 8 percent to 10 percent by 2021," Daimler CEO Dieter Zetsche said in the statement.
For 2019, Daimler said it expects a slight growth in unit sales, revenue and EBIT.
Daimler's earnings before interest and tax (EBIT) dropped to 2.67 billion euros ($3.04 billion) in the fourth quarter, below analysts' expectations of 2.92 billion euros.
Mercedes brand sales rose 4 percent in the fourth quarter but increased tariffs on vehicles exported from the U.S. to China and delivery stoppages for individual diesel models hit demand and resulted in weaker prices.
Mercedes emerged as the biggest selling luxury brand globally last year with 2.31 million new vehicle registrations, followed by BMW brand's 2.12 million and Audi which posted registrations of 1.81 million.
