Reuters: Luxury carmaker Daimler became the latest German firm to reduce business ties with Iran in protest at its nuclear policy, a day after the U.S. called for swift sanctions to pressure Tehran. By Christiaan Hetzner
BERLIN, April 14 (Reuters) – Luxury carmaker Daimler became the latest German firm to reduce business ties with Iran in protest at its nuclear policy, a day after the U.S. called for swift sanctions to pressure Tehran.
Daimler's announcement of plans to sell its 30 percent stake in an Iranian engine maker and freeze the planned export to Iran of cars and trucks follows U.S. President Barack Obama's move to isolate Iran during a recent nuclear security summit in Washington.
That goal was supported by German Chancellor Angela Merkel and Daimler's decision to reduce ties with Iran follows similar action by German peers Siemens, Munich Re and Allianz.
"The policies of the current Iranian leadership have compelled us to put our business relationship with that country on a new footing," Chief Executive Dieter Zetsche told shareholders at Wednesday's annual general meeting.
"In general, our business activities with Iran will now be limited to meeting our existing contractual obligations and continuing our cooperation with established customers."
Daimler said its business with Iran constituted less than a tenth of a percent of its 79 billion euros ($107.9 billion) in total global revenues last year.
Wednesday's move follows Daimler's decision last year to stop supplying parts to Iran Khodro, the Middle East's largest carmaker, which had been assembling a few hundred old Mercedes E-Class models locally.
GHOST OF CHRYSLER
In addition to the Iran plans, Zetsche also sounded a bullish note about full-year profit at Mercedes, after seeing a strong uptick in sales since the start of the year. A near 27 percent increase in Mercedes-Benz brand retail volumes along with a rich model mix leaning heavily towards higher-margin sales of Mercedes E-Class and S-Class vehicles gave Daimler more confidence its car business would earn more than 1.5 billion euros ($2.05 billion) in operating profit this year.
"Following our very good performance over the first three months, the emphasis is here clearly on the words 'more than'," Zetsche said, adding he expects all divisions to return to the black.
Zetsche earned a hefty rebuke from shareholders for his decision to omit a 2009 dividend for the first time in 14 years, although he has pledged to pay out about 40 percent of the group's 2010 net profit.
Last week, Daimler agreed to a cross-shareholding with French peer Renault and Japan's Nissan, cementing a strategic partnership that will stretch from small cars through light commercial vehicles to sharing technology for electric powertrains.
Some investors are sceptical that Zetsche can achieve his plans to save some 2 billion euros through a partnership with loss-making Renault, in particular because an activist French government controls 15 percent of the carmaker's shares.
Daimler also has a poor record for tie-ups, especially in its ill-fated 1998 marriage to Chrysler from which Daimler was able to extricate itself just days before the U.S. carmaker filed for bankruptcy last April.
Zetsche has argued that Daimler has already defined more specific joint projects with Renault at present than after nine years with Chrysler, where he said Daimler mistakenly entered a deal before even identifying the amount of possible savings.
($1=.7322 Euro) (Reporting by Christiaan Hetzner; editing by Simon Jessop)