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Daimler Truck AG Says Russia-Ukraine War Has Limited Impact on Price Increases in 2022

With oil prices at an all-time high, inflation at its peak, and raw materials getting scarce by the day, 2022 might just go down as the worst year for auto manufacturers. On Thursday, Daimler announced that they expect the high cost of raw materials to drive price increases this year.
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Photo: Mercedes-Benz
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The last two years have been anything but chaotic for the auto industry. After suffering through a global health crisi, and an industry-wide chip shortage, they now have to conform with the effects of inflation.

If that’s not enough, raw material prices are at an all-time high, further worsening the tag price of new vehicles.

Industry insiders were optimistic the chip shortage would ease toward the end of the year, but Russia had other plans.

While the situation is only getting worse due to the Russia-Ukraine conflict, German bus and truck maker Daimler insists the price increases have limited impact from the ongoing war, Reuters reported.

According to Daimler Truck AG CEO Martin Daum, the automaker doesn’t source its wire harnesses from Ukraine like its closest rival, MAN. Its finance chief, Jochen Goetz, added that Russia and Ukraine only account for 1% of the manufacturer’s sales.

Daum added that the semiconductor supply would weigh on the result, especially for the first quarter of 2022, since the automaker is sitting on extensive inventories of unfinished vehicles.

According to the CEO, they’ve had to conform with suppliers cutting their orders by half nearly overnight, forcing them to fly parts by helicopter, a situation he has never experienced in his entire career working in the trucking industry.

Daimler Truck AG had a successful run in last year, utilizing a strict fixed cost discipline helping it achieve its financial targets for 2021 despite supply chain headwinds. The truck maker benefited from the most important commercial vehicle sales markets in 2021, increasing its unit sales and overall net profit.

The German truck maker said it expects an increase of 14% in 2022 and a 7% to 9% return on sales, up from 6.1% in 2021,
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About the author: Humphrey Bwayo
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Humphrey is a car enthusiast whose love and passion for automobiles extended into collecting, writing, driving, and working on cars. He got his passion for cars from his Dad, who spent thousands of hours working on his old junky 1970 E20 Toyota Corolla. Years later, he would end up doing the same with a series of lemons he’s owned throughout his adult life.
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