Daimler to expand cost saving measures to narrow gap with BMW

BERLIN: Daimler Chief Executive Dieter Zetsche said the German car and truck maker would continue to cut costs as its premium luxury brand Mercedes-Benz seeks to narrow the profitability gap with rivals.

"Our efficiency measures are having an impact across all divisions, and we will structurally safeguard and expand these measures," Zetsche told shareholders gathered at company's annual general meeting on Wednesday.

Stuttgart-based Daimler currently has two cost-cutting programmes. By the end of 2014, Daimler targets annual savings of 2 billion euros ($2.76 billion) at Mercedes-Benz Cars and 1.6 billion euros of cost cuts and revenue gains at Daimler Trucks.

On a full-year basis, Mercedes-Benz Cars had a return on sales of 6.2 per cent in 2013, lagging Audi's 10.1 per cent and BMW's automotive EBIT margin of 9.4 per cent.

In February, Daimler said it expected group earnings before interest and tax to increase "significantly" in 2014 from the 7.9 billion euros it reported for last year.