AutoBeta(AutoBeta.net)07/31 Report--

Recently, Daimler Group released its second-quarter financial results, which showed that Daimler Group's revenue was 42.65 billion euros, up 5% from a year earlier, and a loss of 1.56 billion euros before interest and tax, compared with a profit of 2.6 billion euros in the same period last year. Daimler shares fell 2.85 per cent the following day, the first quarterly loss for Daimler Group since 2010.

Daimler's second-quarter results came a day after Beijing Auto announced a stake in Daimler, with a 5% stake. For now, Daimler's first and third largest shareholders come from Chinese companies, namely Geely Group, which owns 9.69%, and BAIC Group, which holds 5%.

The deteriorating Daimler is looking for a new starting point, but the previously exposed negative assets have caused irreparable losses to Daimler.

Daimler revealed that Mercedes-Benz's profit was reduced by 777 million euros due to the recall, including Takata airbag Zenai; in addition, some Mercedes-Benz diesel vehicles also lost 1.08 billion euros due to suspected emissions fraud, resulting in a total loss of 1.84 billion euros.

Under the influence of Takata airbag and diesel throttle, Daimler issued another profit warning, which is the third time that Daimler has cut its profit forecast in 12 months. To make matters worse, Daimler expects group earnings before interest and tax in 2019 to be last year. According to the data, Daimler's revenue in the first quarter of 2019 was 39.7 billion euros, roughly the same as last year; profit before interest and tax fell 16% year-on-year to 2.8 billion euros. Daimler Baiou now expects group earnings before interest and tax to be lower than last year's upright level. the company had released a forecast that was basically the same as the same period last year.

On July 24, Daimler announced a new round of cost-cutting efforts to improve profitability. In this regard, Kang Songlin said that the company is currently strengthening the company to review product investment internally according to forward-looking performance plans, in order to ensure the leading strategy and layout in the future.

As a luxury car market-based Daimler Group, the decline in the past two years is becoming more and more obvious. It is worth noting that Daimler's direct cooperation with profile companies in China has acquired greater assets.

As early as 2015, BAIC Group Xu Heyi said that Daimler is the third largest shareholder of BAIC, and BAIC will not be a minority shareholder after it takes a stake in Daimler. The two sides are now Daimler's third largest shareholder, and Geely Group has acquired a 9.69% stake in Daimler for 7.3 billion euros, making it Daimler's largest shareholder. At present, Chinese companies already own 15% of Daimler Group.

BAIC's revenue in the first half of this year was 246.45 billion yuan, up 6% from a year earlier, and profits were up 4.4% from a year earlier. By contrast, Mercedes-Benz sold 1.195 million vehicles worldwide in the first half of the year, not only a 4.7% drop in sales, but also a profit warning. The Chinese market is Daimler's main source of profits, Mercedes-Benz passenger cars in China maintained growth of 1.3%, other markets have declined, to some extent, the Chinese market can be said to be a life-saving demon of the Daimler Group. As a result, Daimler values the Chinese market and is expected to adjust the stock ratio of Beijing Mercedes-Benz.

In fact, Daimler was eager to increase its stake in Beijing Mercedes-Benz to 65%, but Daimler had to give up because of the influence of Chinese policy. Daimler said it planned to increase its stake in Beijing Mercedes-Benz from 49 per cent to 65 per cent after China relaxed its car joint venture ratio and BMW increased its stake in brilliance to 75 per cent at a cost of 3.6 billion euros. But BAIC vehemently denied it, and Daimler did not respond.

Some analysts pointed out that BAIC's stake in Daimler is actually an equivalent exchange with Daimler to increase its stake in Beijing Mercedes-Benz. Daimler's 16% increase in Beijing Mercedes-Benz shares is estimated at 17.8 billion yuan to 23.3 billion yuan, while BAIC's 5% stake is also priced at around 1.9 billion yuan. In view of this, the increase of Daimler's holdings will be realized soon.

While Daimler continues to decline, it is more aware of the importance of the Chinese market and Chinese automobile enterprises. From a long-term point of view, China's automobile market is in a rising period of transformation and development, and independent brands are gradually growing up. Especially in the field of new energy vehicles, cooperative vehicles no longer occupy an absolute advantage. For Daimler, on the one hand, investing in shares will help to further understand the Chinese market, on the other hand, it will ease Daimler's profit warning, and at the same time, it will also play a positive role in the development of Chinese automobile enterprises.

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