Daimler CEO says ‘Diesel is worth fighting for’ as it announces record unit sales and revenue

27 July 2017

Daimler CEO says ‘Diesel is worth fighting for’ as it announces record unit sales and revenue

27 July 2017

Daimler is investing heavily in the development of electric vehicles and is looking to reduce their price while increasing their range but, in the meantime, is reliant on diesel technology which powers many of the Mercedes brand’s profitable sport utility vehicles, sedans and commercial vehicles. It therefore comes as little surprise that Bloomberg reports that Daimler ‘seeks to burnish the [diesel] technology’s battered reputation.’ 

‘Diesel is worth fighting for,’ Chief Executive Officer Dieter Zetsche said on Wednesday (26 July). This announcement comes as Daimler continues to defend accusations that it has cheated emissions tests and has even recalled three million diesel vehicles in Europe and is fitting them with new software intended to reduce nitrogen oxide (NOx) levels. 

Daimler is of course further embattled as it is facing investigation into allegations of colluding with other German carmakers. ‘The car industry is currently causing headlines, and they’re not good ones,’ Bloomberg reports Zetsche said on a conference call with reporters. He added: ‘I know a lot of people want more clarity now, but we can’t comment on speculation.’ 

In addition to the acute challenges Daimler is currently facing, the spectre of possible diesel driving bans in cities and the ban on petrol and diesel vehicles from 2040 announced most recently in the UK but also in France are adding to Daimler’s woes. 

As Bloomberg reports, ‘Carmakers’ fight for diesel goes beyond holding on to a tried-and-tested technology. Until consumers finally buy electric vehicles, manufacturers need diesel as it generates about a fifth less greenhouse gases than comparable gasoline engines. Otherwise, the companies won’t meet Europe’s tightening emissions standards, and face paying fines as of the start of the next decade.’ 

‘We’re convinced, like the rest of the carmaking industry, that we’re headed toward electric mobility,’ Zetsche said. ‘Until that happens, further reductions in CO2 we’ll be achieved through combustion engines, and here the diesel will play a significant role.’ 

The news comes as Daimler announced that it set new records for unit sales and revenue in the second quarter. According to a company statement, ‘The Daimler Group achieved EBIT of €3,746 million in the second quarter of this year, which is a significant 15% higher than the EBIT of €3,258 million posted in the prior-year quarter.’ 

Zetsche said: ‘Our strategy is taking effect. We have set ourselves ambitious goals. And we are achieving them – in terms of unit sales and profitability. Step by step, we are optimizing efficiency throughout the Group. The transformation of Daimler is going ahead at full speed. And we have everything we need for it: the resources to invest and the scope to innovate.’ 

Daimler is certainly pursuing ambitious long-term strategic goals but has it numerous significant hurdles to overcome in the short term. 

Photograph courtesy of Daimler