(Bloomberg) —
Mercedes-Benz AG expects profitability at its main cars division to slip this year as the German manufacturer sees more drag from supply-chain snarls and a surge in raw-material costs.
The automaker forecasts returns for its cars unit of between 11.5% and 13%, slightly lower than last year’s 13.1%, when it swung production to its most profitable models. The semiconductor shortage that has plagued manufacturers globally will remain a hurdle even as the crunch eases somewhat, Mercedes said Thursday.
Vehicle prices will continue to rise but “will not fully offset the raw material headwinds which are expected to increase in 2022 compared with last year,” the company said in a statement.
Chief Executive Officer Ola Kallenius is intensifying efforts to transform one of the most storied automakers into an EV producer that can challenge Tesla Inc. The company aims to have battery-powered models in all its segments this year, a staging post for its ambition to sell only electric cars by 2030.
Mercedes has had more trouble sourcing chips than BMW AG, which last year outsold its rival for the first time since 2015 by better navigating the bottleneck that’s hampered global auto production. While the manufacturer said it expects the chip crunch to stabilize this year, it didn’t say when it sees the shortage ending.
Mercedes fell as much as 6.4% in Frankfurt trading.
Higher-Priced Cars
Sales of higher-priced vehicles including the Maybach luxury sedans, AMG performance models and larger sport utility vehicles helped the company bolster profitability last year despite suffering from production outages. The company said it expects to sell “slightly more” cars this year.
Mercedes proposed a dividend of 5 euros ($5.62) per share, more than triple the 1.35 euros per share last year.
The company formerly known as Daimler AG spun off its truck division in December, ending more than a century of the businesses running under one roof. The move was intended to allow the companies to better focus on preparing for the industry’s sweeping technology shifts.
(Updates with profitability forecast in first, shares in sixth paragraph.)
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