The power of the Mercedes brand will drive Daimler through the global economic storm, but the company will emerge weakened unless it hastens the development of smaller, more environmentally friendly vehicles in response to changing demand, analysts say. And this makes the cash injection by Aabar Investments, based in Abu Dhabi, all the more important to Daimler's prospects.
Daimler has all but written off this year and told investors at last week's annual shareholders' meeting that it would report a "significant loss" for the first quarter. It also expects a "significant" drop in revenue this year due to sliding global sales of its cars and trucks.
Dieter Zetsche, the chief executive of Daimler, is fighting back by slashing costs but added that he could not rule out forced redundancies if the crisis, Germany's worst economic slump since the Second World War, dragged on much longer. Daimler plans to cut labour costs by ?2 billion (Dh9.65bn) this year through an array of measures that include cuts in staff working hours and reductions in bonuses. The company has already cut business travel costs and consultancy fee payments, and executives have taken salary cuts of about 30 per cent.
Daimler's sales last month of 110,400 vehicles delivered a feeble ray of hope because the rate of decline for the Mercedes, Smart, AMG and Maybach brands slowed to 16 per cent from March last year, compared with an alarming 25 per cent drop in February. But the company told shareholders that a turnaround in car markets was unlikely before the end of this year at the earliest.
Jürgen Pieper, an industry analyst at Bankhaus Metzler, a German private bank, says Daimler may post a loss as high as ?1bn for the first quarter, and that it may not return to profitability this year.
"The question one has to ask is whether we will ever return to the old days when the market for premium brands like Mercedes and BMW was always more stable than the mass market," Mr Pieper says.
"Many buyers in western Europe are moving away from big cars and this may turn into a fundamental trend. The premium sector is set to come under increasing pressure from curbs on emissions."
With a long-term shift towards electric-powered vehicles, premium makers such as Mercedes and BMW risked losing a major selling point, the quality of their engines, he says.
"Once the basic technology has been developed in the next 10 to 20 years ? it will be more difficult for manufacturers to emphasise what is special about cars made in Germany, which in many cases has a lot to do with engine technology."
Daimler has recognised the danger and emphasises that its cost cuts will not affect its research into green technology, an element of its co-operation deal with Aabar Investments announced last month.
"Although the crisis is forcing us to cut costs wherever we can, we will not jeopardise our future by reducing essential investment," Mr Zetsche told shareholders.
He says that by 2012, Daimler intends to reduce the average carbon dioxide emissions of its cars in Europe to less than 140 grams per kilometre. Daimler's average for its fleet in 2007, the year for which most recent data is available, was 174 grams.
Arndt Ellinghorst, an industry analyst at Credit Suisse in London, says Daimler's joint-venture deal sealed last December with the German firm Evonik to develop high-performance batteries for electric-powered vehicles shows its commitment to adapting to the market.
"Daimler will definitely adapt by offering more fuel-efficient and smaller cars. The company's big asset is the Mercedes brand, you can do everything with that brand," Mr Ellinghorst says.
"Daimler, like much of the industry, was pretty late in realising the trend, but they are forging ahead strongly now."
In the current crisis, however, the premium status of Mercedes is proving a disadvantage because its sales are not benefiting from the German government's ?2,500 cash bonus being paid to buyers exchanging old cars for more environmentally friendly models.
The bonus, launched to help stimulate the economy where one in five jobs depends on the car sector, has led to sharp increases in domestic sales of smaller cars this year, with new registrations of Volkswagens up 16 per cent in the first quarter, and Fiat, Hyundai and Suzuki more than doubling sales for the same period last year.
Mercedes and BMW are not profiting because the bonus represents a far smaller percentage discount for high-priced cars. "2009 has to be written off. There is no upturn in sight anywhere and all hopes are focused on 2010. If nothing happens, there will definitely have to be redundancies, not just at Daimler but at other manufacturers as well," says Professor Willi Diez, the director of the Institute for Automotive Economy at the Nürtingen-Geislingen Business College.
Mr Zetsche admitted Daimler had been slow to trim production at the start of the crisis, which had left the company with large numbers of unsold cars.
However, media commentators say Daimler has survived far greater management errors in the past, such as its ill-fated acquisition in 1998 of Chrysler, the ailing US car maker it managed to sell in 2007, before the economic crisis struck.
For now, Daimler is pinning its hopes on the E-class Mercedes, the new version of which was unveiled last month. It said it had received 50,000 orders for the new model by the end of the first quarter.
The Aabar stake purchase is also proving a boost. Analysts say Aabar is an ideal investor because it has a long-term focus and is unlikely to interfere much in management.
"Aabar's investment makes Daimler less vulnerable to a takeover and speculation that the car maker may face a hostile bid has now abated," says Mr Pieper.
Germany hailed the stake purchase last month as a much-needed sign of confidence in the nation's manufacturing, although some Daimler shareholders accused the management of selling the stake at an excessively low price.
Mr Pieper says that while Daimler's liquidity had been battered by the crisis, he did not see the company's existence as under threat. "They are fundamentally too strong in the business for that. They always have a number of options to rescue their finances."
In the long-term though, analysts believe that Daimler will have to swallow its pride and co-operate with another car maker, possibly BMW, to achieve the necessary cost savings through economies of scale. "Volkswagen is profiting from its critical mass," says Mr Ellinghorst. "I keep repeating that Mercedes and BMW will need to move together."
@Email:dcrossland@thenational.ae
Russia's Muslim Heartlands
Dominic Rubin, Oxford
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
Places to go for free coffee
- Cherish Cafe Dubai, Dubai Investment Park, are giving away free coffees all day.
- La Terrace, Four Points by Sheraton Bur Dubai, are serving their first 50 guests one coffee and four bite-sized cakes
- Wild & The Moon will be giving away a free espresso with every purchase on International Coffee Day
- Orange Wheels welcome parents are to sit, relax and enjoy goodies at ‘Café O’ along with a free coffee
BACK%20TO%20ALEXANDRIA
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The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Abramovich London
A Kensington Palace Gardens house with 15 bedrooms is valued at more than £150 million.
A three-storey penthouse at Chelsea Waterfront bought for £22 million.
Steel company Evraz drops more than 10 per cent in trading after UK officials said it was potentially supplying the Russian military.
Sale of Chelsea Football Club is now impossible.
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Ballon d’Or shortlists
Men
Sadio Mane (Senegal/Liverpool), Sergio Aguero (Aregentina/Manchester City), Frenkie de Jong (Netherlans/Barcelona), Hugo Lloris (France/Tottenham), Dusan Tadic (Serbia/Ajax), Kylian Mbappe (France/PSG), Trent Alexander-Arnold (England/Liverpool), Donny van de Beek (Netherlands/Ajax), Pierre-Emerick Aubameyang (Gabon/Arsenal), Marc-Andre ter Stegen (Germany/Barcelona), Cristiano Ronaldo (Portugal/Juventus), Alisson (Brazil/Liverpool), Matthijs de Ligt (Netherlands/Juventus), Karim Benzema (France/Real Madrid), Georginio Wijnaldum (Netherlands/Liverpool), Virgil van Dijk (Netherlands/Liverpool), Bernardo Silva (Portugal/Manchester City), Son Heung-min (South Korea/Tottenham), Robert Lewandowski (Poland/Bayern Munich), Roberto Firmino (Brazil/Liverpool), Lionel Messi (Argentina/Barcelona), Riyad Mahrez (Algeria/Manchester City), Kevin De Bruyne (Belgium/Manchester City), Kalidou Koulibaly (Senegal/Napoli), Antoine Griezmann (France/Barcelona), Mohamed Salah (Egypt/Liverpool), Eden Hazard (BEL/Real Madrid), Marquinhos (Brazil/Paris-SG), Raheem Sterling (Eengland/Manchester City), Joao Félix(Portugal/Atletico Madrid)
Women
Sam Kerr (Austria/Chelsea), Ellen White (England/Manchester City), Nilla Fischer (Sweden/Linkopings), Amandine Henry (France/Lyon), Lucy Bronze(England/Lyon), Alex Morgan (USA/Orlando Pride), Vivianne Miedema (Netherlands/Arsenal), Dzsenifer Marozsan (Germany/Lyon), Pernille Harder (Denmark/Wolfsburg), Sarah Bouhaddi (France/Lyon), Megan Rapinoe (USA/Reign FC), Lieke Martens (Netherlands/Barcelona), Sari van Veenendal (Netherlands/Atletico Madrid), Wendie Renard (France/Lyon), Rose Lavelle(USA/Washington Spirit), Marta (Brazil/Orlando Pride), Ada Hegerberg (Norway/Lyon), Kosovare Asllani (Sweden/CD Tacon), Sofia Jakobsson (Sweden/CD Tacon), Tobin Heath (USA/Portland Thorns)
Mountain%20Boy
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Zainab%20Shaheen%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Naser%20Al%20Messabi%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3C%2Fstrong%3E%3A%203%2F5%3C%2Fp%3E%0A
The Bio
Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”
Holiday destination: “I like Paris very much, it’s a city very close to my heart.”
Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”
Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
COMPANY%20PROFILE
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Understand What Black Is
The Last Poets
(Studio Rockers)
MATCH INFO
Uefa Champions League quarter-final, second leg (first-leg score):
Manchester City (0) v Tottenham Hotspur (1), Wednesday, 11pm UAE
Match is on BeIN Sports
'Unrivaled: Why America Will Remain the World’s Sole Superpower'
Michael Beckley, Cornell Press
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Shubh Mangal Saavdhan
Directed by: RS Prasanna
Starring: Ayushmann Khurrana, Bhumi Pednekar
West Asia rugby, season 2017/18 - Roll of Honour
Western Clubs Champions League - Winners: Abu Dhabi Harlequins; Runners up: Bahrain
Dubai Rugby Sevens - Winners: Dubai Exiles; Runners up: Jebel Ali Dragons
West Asia Premiership - Winners: Jebel Ali Dragons; Runners up: Abu Dhabi Harlequins
UAE Premiership Cup - Winners: Abu Dhabi Harlequins; Runners up: Dubai Exiles
UAE Premiership - Winners: Dubai Exiles; Runners up: Abu Dhabi Harlequins
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Company%20profile
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Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Fast%20X
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Louis%20Leterrier%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Vin%20Diesel%2C%20Michelle%20Rodriguez%2C%20Jason%20Statham%2C%20Tyrese%20Gibson%2C%20Ludacris%2C%20Jason%20Momoa%2C%20John%20Cena%2C%20Jordana%20Brewster%2C%20Nathalie%20Emmanuel%2C%20Sung%20Kang%2C%20Brie%20Larson%2C%20Helen%20Mirren%20and%20Charlize%20Theron%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
Auron Mein Kahan Dum Tha
Starring: Ajay Devgn, Tabu, Shantanu Maheshwari, Jimmy Shergill, Saiee Manjrekar
Director: Neeraj Pandey
Rating: 2.5/5
Aston martin DBX specs
Engine: 4.0-litre twin-turbo V8
Transmission: nine-speed automatic
Power: 542bhp
Torque: 700Nm
Top speed: 291kph
Price: Dh848,000
On sale: Q2, 2020
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
THE BIO
Favourite car: Koenigsegg Agera RS or Renault Trezor concept car.
Favourite book: I Am Pilgrim by Terry Hayes or Red Notice by Bill Browder.
Biggest inspiration: My husband Nik. He really got me through a lot with his positivity.
Favourite holiday destination: Being at home in Australia, as I travel all over the world for work. It’s great to just hang out with my husband and family.
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
Picture of Joumblatt and Hariri breaking bread sets Twitter alight
Mr Joumblatt’s pessimism regarding the Lebanese political situation didn’t stop him from enjoying a cheerful dinner on Tuesday with several politicians including Mr Hariri.
Caretaker Culture Minister Ghattas Khoury tweeted a picture of the group sitting around a table at a discrete fish restaurant in Beirut’s upscale Sodeco area.
Mr Joumblatt told The National that the fish served at Kelly’s Fish lounge had been very good.
“They really enjoyed their time”, remembers the restaurant owner. “Mr Hariri was taking selfies with everybody”.
Mr Hariri and Mr Joumblatt often have dinner together to discuss recent political developments.
Mr Joumblatt was a close ally of Mr Hariri’s assassinated father, former prime minister Rafik Hariri. The pair were leading figures in the political grouping against the 15-year Syrian occupation of Lebanon that ended after mass protests in 2005 in the wake of Rafik Hariri’s murder. After the younger Hariri took over his father’s mantle in 2004, the relationship with Mr Joumblatt endured.
However, the pair have not always been so close. In the run-up to the election last year, Messrs Hariri and Joumblatt went months without speaking over an argument regarding the new proportional electoral law to be used for the first time. Mr Joumblatt worried that a proportional system, which Mr Hariri backed, would see the influence of his small sect diminished.
With so much of Lebanese politics agreed in late-night meetings behind closed doors, the media and pundits put significant weight on how regularly, where and with who senior politicians meet.
In the picture, alongside Messrs Khoury and Hariri were Mr Joumbatt and his wife Nora, PSP politician Wael Abou Faour and Egyptian ambassador to Lebanon Nazih el Nagari.
The picture of the dinner led to a flurry of excitement on Twitter that it signified an imminent government formation. “God willing, white smoke will rise soon and Walid Beik [a nickname for Walid Joumblatt] will accept to give up the minister of industry”, one user replied to the tweet. “Blessings to you…We would like you to form a cabinet”, wrote another.
The next few days will be crucial in determining whether these wishes come true.
The%20Woman%20King%20
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