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• DaimlerChrysler to Produce Dodge Durango with Patented Through-the-Road Hybrid Powertrain

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• GM Links Universities In Shanghai, Michigan To Carry Out Research For GM Ventures In China 

• Volvo Cars Safety Centre Re-Creates Reality of the Roads

• Toyota Announces All-New Sequoia Full-Size Sport Utility Vehicle Pricing

• DaimlerChrysler Continued Growth in Third Quarter 
  .
• MINI Makes Its First Marketing Move In The U.S.
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• Saturn LST Concept A True Sports Sedan 

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News of  October 31, 2000

DaimlerChrysler Continued Growth in Third Quarter 

• Revenues increased by 8% to $32.8 billion
• Operating profit above last year's level; without one-time effects below last year
• Net income increased 54% to $2.7; without one-time effects decrease to $0.3
• Earnings per share up 54% to $2.66; without one-time effects EPS decreased to $0.29
• Outlook for full year 2000: Operating profit expected to reach last year's level

Stuttgart/Auburn Hills - DaimlerChrysler continued to grow and strengthen its global market position in the third quarter 2000, despite intense competition for market share in North America. 

Revenues on a comparable basis increased by 8% over the third quarter of 1999 to $32.8 billion. Operating profit, including one-time effects, totaled $3.1 billion, slightly above last year's high level ($2.9 billion).  

At $0.5 billion, adjusted operating profit was below last year's high level ($2.3 billion), mainly due to a market-related reduction in earnings at the Chrysler Group and the Services divisions. 

Net income, including non-recurring income and expenses, increased from $1.7 billion to $2.7 billion; earnings per share rose from $1.72 to $2.66. Adjusted for one-time effects, net income fell in the third quarter from $1.3 billion to $0.3 billion. Earnings per share, adjusted for one-time effects, were $0.29 (Q3 1999: $1.33). 

For the period January - September 2000, revenues were up 14% to $107.7 billion on a comparable basis. Operating profit, including one-time effects, of $7.5 billion was at a similarly high level to the previous year ($7.6 billion), while net income rose 40% to $5.7 billion and earnings per share also 40% to $5.70. 

At the end of the third quarter 2000, DaimlerChrysler had 440,300 employees. Adjusted for changes brought about by consolidation measures, the number of employees increased by 3%. 

High non-recurring income and expenses in Q3 2000 

Operating profit and net income were strongly affected by non-recurring income and expenses in the third quarter of 2000. The de-consolidation of Dasa alone generated income of $2.9 billion. Depreciation of leased vehicles' residual value had a negative effect totaling $0.4 billion.  

The third quarter of 1999 was marked by total non-recurring income of $0.7 billion, mainly due to the sale of debitel shares. 

Outlook for 2000 as a whole 

DaimlerChrysler expects favorable developments for fourth quarter vehicle sales. Sales for the year 2000 are expected to exceed 4.8 million vehicles, around the same level as last year. Revenues for the year as a whole are expected to increase to approximately $141 billion despite the de-consolidation of Dasa and debis Systemhaus. 

DaimlerChrysler anticipates that operating profit for the year as a whole, including all non-recurring income and expenses, will reach last year's level and that net income and earnings per share will be significantly higher than in 1999. Excluding non-recurring extraordinary items, operating profit in 2000 is expected to total somewhere around $6 billion (comparable figure for 1999: $8.8 billion). 

Sales record for Mercedes-Benz Passenger Cars & smart division 

The strongest growth in revenues and earnings in the third quarter of 2000 were in the Mercedes-Benz Passenger Cars & smart division. Revenues increased 15% to $9.3 billion. Despite higher costs due to the development of new products, operating profit at the division was also up 15% to $721 million. Adjusted for one-time effects, operating profit was up 5% to $657 million. Sales of Mercedes-Benz passenger cars rose 3% to 249,500 units in the third quarter. The biggest sales increases were posted in Eastern Europe (+63%) and Australia (+28%), followed by Western Europe (+6%) and Asia (+5%). Sales in Germany increased by 9%, despite a sharp market downturn in the country. A total of 767,900 Mercedes-Benz passenger cars were sold in the period January-September 2000, a 5% increase from the same period last year. 

Smart sold 25,900 units in the third quarter (+13%), thereby continuing the brand's very positive development. Sales of the smart increased 51% in the first nine months of the year to 77,600 vehicles. 

The Chrysler Group division recorded a 14% drop in sales to 623,000 units in the third quarter, primarily due to the introduction of several new products and an extremely competitive U.S. market. The Chrysler Group sold 2,397,700 vehicles in the first nine months of 2000, slightly less than the high level recorded in the same period last year (2,407,200). The appreciation of the dollar against the euro counteracted the effects of the decline in sales and higher marketing costs, thereby leading to third quarter revenues of $13.4 billion at the Chrysler Group, the same high level as last year. 

Costs associated with higher sales incentives for models at the end of their lifecycle and for inventory reductions, and higher launch costs for the new products, resulted in a third quarter operating loss of $0.5 billion (Q3 1999: operating profit adjusted for one-time effects of $1.0 billion) at the Chrysler Group - - as reported on September 27. 

New and innovative products that have now been introduced will enable the Chrysler Group to improve again its competitive position. It is expected that the division will return to profitability in the fourth quarter. For the year 2000, the Chrysler Group anticipates an operating profit of more than $1.8 billion (1999: $4.5 billion). 

The Commercial Vehicles division was able to further strengthen its worldwide leading position, despite a 10% drop in sales to 126,400 units. The division sold 407,700 vehicles in the first nine months of 2000, nearly the same number as during the same period in 1999 (410,800). At $256 million, operating profit in the third quarter was marginally below reach last year's level ($268 million), primarily due to a significant drop in U.S sales. For the year as a whole, the division expects unit sales to be slightly below last year's level. Revenues should be around the same level as in 1999, while operating profit should surpass last year's high figure. 

Revenues at the Services division rose up sharply by 45% in the third quarter to $4.3 billion. Because of higher refinancing costs and the corresponding pressure on margins, operating profit adjusted for one-time effects totaled $66 million, below last year's figure ($248 million). 

Incentives necessary to maintain market share for certain Chrysler Group models led to lower residual values for leased vehicles. This residual value risk, especially prominent in the U.S., is reflected in DaimlerChrysler's one-time value adjustment of $0.4 billion. A redesigned leasing strategy and extensive marketing measures to boost sales of used vehicles is expected to counteract such negative effects in the future. 

Aerospace: Following the IPO of the European Aeronautic Defense and Space Company (EADS) on July 10, 2000, Dasa is no longer included in DaimlerChrysler's financial statement since July 1, 2000.  

EADS is accounted for as equity in line with DaimlerChrysler's holding (approximately 30%). The Aeroengines business unit, however, remains fully consolidated. In the third quarter this unit increased revenues by 19% and incoming orders by 35%. DaimlerChrysler also expects revenues and incoming orders in the Aeroengines business unit for the entire year to be substantially above the previous year's figures. 

Adtranz increased revenues by 14% to $0.9 billion in the third quarter. The sale of Adtranz to Bombardier is currently under review by international antitrust authorities. Restructuring measures are continuing as planned and are making good progress. 

Both TEMIC and MTU/Diesel Engines continued positive business developments in the third quarter, posting increases in revenues and new orders.

U.S. dollar figures are for convenience only. All values, including the 1999 figures, are converted from euro figures with the exchange rate of 1 euro=USD 0.8837 (Noon Buying Rate of the Federal Reserve Bank of New York on September 29, 2000)  

(October 26, 2000)

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