June 20, 2018 / 8:42 PM / a month ago

Daimler predicts lower 2018 EBIT, blames trade war, emissions clampdown

FRANKFURT, June 20 (Reuters) - Daimler on Wednesday said profits would fall in 2018 because new import tariffs on cars exported from the United States to China would hurt sales of high-margin Mercedes-Benz sports utility vehicles.

On a group level, its earnings before interest and taxes (EBIT) would now be slightly below the previous year’s level, rather than slightly above, Daimler said in a regulatory filing late on Wednesday.

“Fewer than expected SUV sales and higher than expected costs - not completely passed on to the customers - must be assumed because of increased import tariffs for U.S. vehicles into the Chinese market,” it said in a regulatory statement.

Daimler’s Mercedes-Benz brand has a factory in Tuscaloosa, Alabama, where it makes sports utility vehicles exported to the rest of the world, including China.

Daimler said a new vehicle certification process based on stricter fuel efficiency test procedures will hit sales in the second half of the year and warned that earnings at Mercedes-Benz Vans would also suffer because of a vehicle recall for diesel-engined models.

As a result, EBIT at its Mercedes-Benz Cars division would now be slightly below the previous year, and significantly below the previous year’s level in the vans division, Daimler said. (Reporting by Edward Taylor)

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