Daimler share price hit by diesel scandal erodes profit growth
The maker of Mercedes-Benz was forced to recall more of its cars in emissions cheat probe, putting a major dent in its profit growth.
Daimler was forced to issue its third profit warning of the year as its diesel engine emissions scandal destroys growth at the Mercedes-Benz maker.
The German auto company was forced to cut its 2019 profit forecast ahead of its second quarter (Q2) earnings, as the fallout from its emissions scandal forces the business to recall more cars.
In fact, the company is expected to recall a further 60,000 diesel engine cars, with the carmaker already forced to return 700,000 vehicles to its factories since April.
Daimler share price slides further after profit warning
The news prompting a reaction from investors, who helped drag the carmaker’s share price down more than 3.6% on Monday, with the company’s stock already losing more than 20% of its value since April.
In a statement, Daimler said that ‘various ongoing governmental proceedings and measures relating to diesel vehicles’ will take its toll on the carmaker’s Q2 earnings, with it forecasting that its 2019 profit will come in flat with last year.
Daimler and other German carmakers still reeling from diesel scandal
German carmakers have all faced the wrath of regulators since Volkswagen was found to have rigged millions of diesel engines to cheat on carbon emissions tests back in 2015.
The news called into question the environmental impact of diesel engines and has hurt the bottom lines of Daimler, BMW and Volkswagen.
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