* New vehicle key to Daimler plans in weak market
* S-Class range carries double-digit profit margins
* Top-end model to compete with Rolls-Royce and Bentley
FRANKFURT, Feb 20 Daimler's summer
launch of its Mercedes-Benz S-Class saloon will not be delayed
by uncertainty over whether the German car maker must use
Honeywell's new air-conditioning refrigerant.
"The S-Class will ramp up as planned and enter the market
this summer," a spokesman said on Wednesday, denying that its
refusal to comply with European Union legislation over the use
of the new refrigerant could force authorities to delay or even
stop its launch.
Daimler is banking on the success of the new S-Class,
expected to hit European markets in July, to help it to offset a
weak first half and achieve flat underlying full-year profit.
The flagship S-Class range is a cash cow for Mercedes thanks
to its estimated double-digit profit margins.
"While news over a delay to the S-Class are obviously of
great interest to the German press, we are somewhat more
sceptical as to whether the (refrigerant) issue can really delay
the launch of the vehicle," Credit Suisse said in a note to
The impending launch has acquired additional significance as
a replacement for Daimler's now-defunct Maybach. A more
luxurious version of the S-Class - expected to be called the
Pullman - will compete with BMW's Rolls-Royce and
Volkswagen's Bentley cars.
The new S-Class was approved for sale in the European Union
under the requirement that it does not use the R134a
air-conditioning refrigerant - a hydrofluorocarbon that can warm
the climate roughly 1,400 times more than carbon dioxide when it
escapes into the atmosphere.
Citing safety risks, Daimler has since refused to use the
HFO-1234yf refrigerant that is the only one to meet the EU
requirements and is supplied exclusively by Honeywell and its
production partner DuPont.
The EU said that there are no grounds for extending the
phase-in of its directive, but it has requested that the German
authorities substantiate their safety concerns with a definitive
report by the KBA motor vehicle authority.
The KBA approves new cars for sale in Germany on behalf of
the EU and could theoretically force Daimler to cease selling
its A-Class, B-Class and S-Class vehicles, which are all
required to use the new refrigerant in Europe.
Daimler, Volkswagen and BMW all withdrew from an industry
working group looking into the safety of the refrigerant,
criticising the group's methods and two press statements
defending the chemical before test results are published in the
"We would hope that the KBA understands that Daimler's
concerns over HFO-1234yf are legitimate and that an amicable
solution to the issue can be found," Credit Suisse said.