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DC profits take a hit
Page 10
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Daimler Chrysler CV has had a good year, but its takeover of IV istubishi Fuso has affected profits. Colin Barnett reports.
DAIMLERCHRYSLER'S Commercial Vehicle Division, which includes Mercedes Benz, is set to take a huge dent in its profits as a result of its stake in Mitsubishi Fuso Truck and Bus Corporation.
Last year DC acquired a majority holding in Mitsubishi Fuso, which makes trucks including the Canter, from the car-making Mitsubishi Motor Corporation_ But it unwittingly inherited a saga of vehicle defects and cover-ups.
DC has had to recall more than 500,000 vehicles in Japan; police have been busy investigating the extent of the cover-up. Vehicles built in Portugal for the European market were not affected.
In what promises to be a highly successful year,with an anticipated operating profit of £736m. the recalls and quality control improvements have cost about £4100m in the third quarter of this year, on top of 170m spent in the second quarter.
Far from taking the situation lying down, DaimlerChrysler is investigating the possibility of taking legal action to recoup its losses. Ironically, it faces a similar lawsuit from rival truck manufacturer MAN over financial problems in its acquisition of ERF from DC subsidiary Western Star.