Daimler Quarterly Profits Up Despite Chip Crisis

German luxury automaker Daimler on Friday reported a strong profit boost in the third quarter despite a steep drop in vehicle production due to the global semiconductor shortage. The Mercedes-Benz maker said in a statement its net profit surged 19 percent year-on-year to 2.57 billion euros ($3.0 billion) while earnings before interest and taxes rose four percent to 3.61 billion euros.

"We remain on track to meet our full-year targets thanks to a more robust business... despite a challenging environment," CFO Harald Wilhelm said.

He said the company had been able to buck the chip crisis plaguing the sector by getting its fixed costs under control and adjusting its pricing scheme.

Nevertheless the group said sales and production had slipped markedly, with revenue down to 40.1 billion euros from 40.3 billion euros in the third quarter of 2020.

Daimler said it was having trouble meeting strong demand for its vehicles, which had knocked its sales figures.

Daimler and other manufacturers around the world have been forced to trim car production in recent months because of a semiconductor chip crunch fuelled by a pandemic-driven surge in demand for home electronics.

The shortage threatens to slow carmakers' recovery from the painful factory and showroom closures seen during the first coronavirus wave in early 2020, which plunged the industry into crisis.

Daimler said it was having trouble meeting strong demand for its vehicles, which had knocked its sales figures.

The manufacturer moved just 577,800 cars and commercial vehicles in the third quarter, down 25 percent on 2020 -- a year already marked by the pandemic.

The US market contracted by 13 percent while sales in China tumbled 12 percent. The impact was felt most strongly in Europe with a 22-percent decline in turnover.

The shortages will continue to have a "significant impact" on global production in the fourth quarter and into 2022, even as the situation "gradually improves," Daimler said.