Daimler Forecasts Car-Unit Earnings Drop on European Decline

Daimler AG, the world’s third-largest luxury-vehicle maker, said earnings at its car division will drop in 2012 as a European auto-market decline hits profit in the second half.

“The overall environment in Europe is deteriorating, with more negative developments than expected,” Chief Executive Officer Dieter Zetsche said at a press conference at Daimler headquarters in Stuttgart, Germany. “There is also significantly sharpening competition in China.” Earnings at the Mercedes-Benz Cars unit in the second six months of 2012 will be lower than in the first half, he said.