The global semiconductor shortage will cost billions in lost revenue for soon-to-be-independent Daimler Truck, and the situation is likely to continue into 2022, CEO Martin Daum told a German newspaper.
In comments to Automobilwoche reported on Sunday, Daum said the chip shortage would be a significant financial hit.
“It is a huge sum,” Daum told Automobilwoche, saying the company would sell a “mid-five-digit number” fewer vehicles than it could have.
Automobilwoche said that with an average price of $113,170 per vehicle, Daimler Truck’s revenue loss would be in the billions of dollars.
‘Vehicles sitting in the factory’
“We also have many vehicles sitting in the factory where just one part is missing. These deliveries are a priority because they are already sold,” Daum said.
Unrelated to the chip shortage, Daimler Truck has laid out aggressive cost-cutting plans to improve profit margins. The company has advanced by two years to 2023 a plan to reduce fixed costs by 15% compared to 2019.
What that means for Daimler Trucks North America is continuing to pull its load. Assuming a strong market in 2025, DTNA is expected to put up a 12% return on sales, second only to 14% for the financial services business.
To meet that target, DTNA has to hold down costs and improve its share in the off-highway market where Western Star is rebranding its products as the X-series, said John O’Leary, DTNA president and CEO.
Daimler is the world’s largest manufacturer of heavy-duty trucks. It will become a stand-alone company on Dec. 10, trading on the Frankfurt Stock Exchange. It has been part of Daimler AG, which includes Mercedes-Benz luxury cars.
The split-off of Daimler Truck is the second reshaping industry move this year. Volkswagen AG’s Traton Group now controls Navistar Inc., opening a door to the North American market for Traton.