Feb. 17 (Bloomberg) -- Daimler AG, the world’s second- biggest maker of luxury cars, said shrinking car markets will impose “substantial burdens” on earnings this year and cause sales at its Mercedes-Benz Cars division to drop.

Daimler fell as much as 7.4 percent in Frankfurt trading after the Stuttgart, Germany-based company reported a fourth- quarter net loss of 1.53 billion euros ($1.93 billion), or 1.61 euros a share, compared with net income of 1.7 billion euros, or 1.70 euros, a year earlier. The loss was wider than analysts’ 227 million-euro median loss estimate.

Earnings in the quarter were burdened by a 1.67 billion-euro charge to write down loans and other assets related to the disposal of the former Chrysler division, Daimler said. Chrysler earnings led to an additional charge of 343 million euros.

To contact the reporters on this story: Mike Gavin in Frankfurt at mgavin2@bloomberg.net; Chris Reiter in Stuttgart, Germany, via creiter2@bloomberg.net.

Last Updated: February 17, 2009 04:26 EST