Crouching Tiger, Speeding Dragon

08102019---mercedes-benz

Image source: Takorn, Art Konovalov, Pajor Pawel - Shutterstock

What's going on?

Global car sales are falling – but on Monday, Daimler-owned Mercedes-Benz reported that Chinese enthusiasm drove its third-quarter sales to their highest ever.

What does this mean?

Mercedes sold 12% more cars last quarter than it did a year earlier, making up for a stuttering start to the year. Records were set in China, where 13% more Mercedes vehicles were sold in the quarter. And September was particularly good, especially in Daimler’s home country: German sales were up 25% from last year. The US brought up Mercedes’ rear: rival BMW snatched September’s pole position there by selling 34 more cars.


This time last year, Daimler had warned its profit would be lower than planned thanks to the US-China trade war reducing Chinese demand. Weak sales last year, then, set a low bar for this year’s growth – but for Daimler’s investors, it’s still good news.

Why should I care?

The bigger picture: Oktoberfest might not be cancelled.


Germany’s currently in a rough patch: new data on Monday showed that German factories’ orders continued to decline in August. But Mercedes’ update might offer some comfort: the auto industry represents 5% of the German economy, and high German sales growth shows consumers are now happy to spend. If Daimler stays in high gear this quarter, it might accelerate the German economy – and stave off a recession.



For you personally: Watch your back.


Daimler’s employees may breathe a sigh of relief: they’ll probably avoid the fate of General Electric’s (GE’s) workers. Longtime Finimize readers might recall GE’s struggles: once the US’s biggest company, its share price has fallen 73% since January 2017. Its huge debt pile led it to freeze 20,000 of its employees’ pension benefits on Monday: they’ll now get paid less in retirement than they expected. It’s a reminder that big companies’ woes don’t just hurt investors – its workers often lose out too.

Originally posted as part of the Finimize daily email.

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