Mercedes Reports 55 Percent EBIT Drop in 2008

Taking into account the economic turmoil that occurred in the third and fourth quarter of 2008, the disappointing figures automakers are now reporting shouldn't amaze anyone. Mercedes is probably the best example as parent company Daimler has just published its annual report, unveiling massive drops in almost every single division.

The Mercedes-Benz car division reported an EBIT drop of 55 percent compared to the year before, with revenues falling from 52,430 million euros to 47,772 million euros. Even though unit sales dropped to 1,273,013 vehicles in 2008, Mercedes-Benz actually managed to preserve jobs and maintain the 97,303-unit workforce reported at the end of the year.

Daimler's chairman Dieter Zetsche explained the last year's revenues were divides into two opposed parts, with the first half bringing steady sales while the second half slashed revenues in almost every single area.

"2008 was a year with two very different stories for Daimler. Our first-half results were very good. We achieved record unit sales of automobiles, vans and buses. That demonstrates your company’s capabilities under “normal circumstances"," he said in a statement for the press.

"In the second half of the year, circumstances were anything but normal. The automotive industry around the world was hit hard by the financial crisis – which quickly became a global recession. We felt its effects on our unit sales, revenue and earnings in the third and fourth quarters, especially at our car division."

Overall, Daimler achieved a net profit of 1.4 billion euros in 2008, with EBIT from ongoing operations, excluding Chrysler, amounted to 6.2 billion euros. 2008 also represented the best year ever for smart, the company said, with Mercedes-Benz S-Klasse achieving high sales as well.