AutoBeta(AutoBeta.net)03/27 Report--

German carmaker Daimler is in contact with a number of banks to seek credit support of about 10 billion euros (78 billion yuan) to help it cope with the impact of COVID-19 's epidemic, foreign media reported on March 27. The negotiations are still ongoing and details are expected to be released next week, and Daimler has not commented on the report.

One of the problems that Daimler's financial situation has been pressing to solve. In fact, the German carmaker's financial problems emerged last year. In November 2019, Daimler announced that it would cut at least 10, 000 jobs worldwide and cut staff costs by about 1.4 billion euros by the end of 2022. In addition, the company will cut 10 per cent of its global management positions and about 1100 management staff will be laid off.

In addition, the simmering diesel scandal and recall have taken a "heavy toll" on Daimler. According to Daimler's preliminary assessment, the cost of government and court litigation related to the diesel scandal in 2019 is 1.1 billion to 1.5 billion euros, and the total number of vehicles recalled by Daimler in the past three years has been close to 4 million.

According to Daimler's 2019 fiscal year report, Daimler's turnover rose 3 per cent year-on-year to 172.7 billion euros in 2019; net profit fell 64.5 per cent to 2.7 billion euros; and most importantly, free cash flow was only 1.4 billion euros, down 51.7 per cent from the same period last year.

Daimler was haunted by its poor performance in 2019, and the global spread of the COVID-19 epidemic has added to the financial pressure on the German carmaker. Since mid-March, a number of Daimler plants in Europe and the United States have been closed, initially at Bremen, Rastat and Sindfengen in Germany. Subsequently, the Hambach plant in France, the Moscow plant in Russia, and the Tuscaloosa and Charleston plants in the United States were shut down for as little as two weeks.

In addition, there are media reports that if Daimler's financial pressure will further expand, Daimler may face the possibility of a hostile takeover. Previously, in order to protect domestic enterprises from hostile takeovers by foreign investors, the German government has set up a "economic stability fund" of up to 600 billion euros and a legislative plan of 150 billion yuan for "COVID-19 epidemic Relief Plan" to rescue the market. to carry out further assistance to German enterprises. But Daimler CEO Conlinson said that although Daimler had stopped production in large numbers in Europe, it was still well funded and did not need to apply for government aid, and he added at the time that the auto industry still had very large orders before the crisis.

In addition to Daimler Group, many car companies also face the problem of cash flow emergency. Toyota has sought credit lines totaling 1 trillion yen ($9.2 billion) from two big Japanese banks, Sumitomo Mitsui and Mitsubishi UFJ, Kyodo news agency reported, citing sources.

As of the 27th day, according to the statistics of the Robert Koch Institute of German Disease Prevention and Control Agency, a total of 42288 cases of COVID-19 infection were confirmed in Germany, with 5780 new cases in Germany in one day. The inflection point is still a long way off, and the only consolation for the carmaker is that Daimler's plant in China has fully resumed work.

Some analysts said that major car companies are taking a series of measures to deal with the impact of the epidemic, including expanding profits and revenue, cutting costs and obtaining cash flow through credit to tide over the crisis.

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