LONDON: A global shortage of semiconductor chips will dent car sales in the second half of 2021 and will extend into 2022, Daimler AG said on Wednesday, but the maker of Mercedes-Benz vehicles left unchanged its profit margin outlook for this year.
Along with other carmakers, Daimler cut back production this year because of a chip shortage during the coronavirus pandemic, prompting the German company to focus on higher-margin models.
Chief Financial Officer Harald Wilhelm told investors that although the chip shortage would last into 2022, it would be less severe than this year.
The premium carmaker, which also faces the challenge of high prices for steel, copper and aluminum in the second half of 2021, said its visibility into how chip supply would develop was currently low.
“Improving supply visibility is a top priority for us,” Chief Executive Ola Källenius told a conference call with analysts and investors, although he said the chip shortage “is a fixable problem.”
The shortage comes as demand for cars has spiked during the global economy’s recovery from the coronavirus crisis, driving up prices of new and used vehicles as inventories shrink.
Some carmakers have adapted to the chip shortage by dropping some features from their models. General Motors Co. said in March some pickup trucks would not have a fuel management module, hurting their fuel economy performance.
Others, including Daimler, have produced vehicles that are still waiting for chips so they can be completed.
“We have some unfinished cars, but we have not let this balloon out of proportion,” Källenius said.
Mercedes-Benz car sales in the second quarter jumped 27 percent, with a 54 percent jump in Europe, Daimler’s second market after China.
After soaring in late 2020 and the first quarter, Mercedes-Benz sales in China gained just 5.8 percent in the second quarter.
Källenius said order books for the flagship S-class sedans were “very healthy.” But he said the supply chain issues “are holding us back.”
The company said it expected full-year car sales to be in line with 2020 levels, after previously forecasting car unit sales this year would be significantly above last year’s.
Daimler said 2021 adjusted profit margins at its truck and bus division would be between 6 percent and 7 percent, which is below its previous forecast for a range of 6 percent to 8 percent.
The company confirmed second-quarter adjusted group earnings before interest and tax (EBIT) at 5.42 billion euros ($6.38 billion), with car and truck divisions beating analyst targets.
Daimler sees chip shortage dragging on into 2022
https://arab.news/mckxj
Daimler sees chip shortage dragging on into 2022
- Daimler cut production due to chip shortage
- Company sees less severe chip shortage in 2022
Global investors commit more than $3bn to King Salman Park as Saudi giga-project secures new deals
RIYADH: The King Salman Park Foundation has secured more than $3.8 billion in new private-sector commitments at the MIPIM 2026 real estate conference, including a landmark $3 billion fund backed by international investors to develop a major mixed-use district in the heart of Riyadh.
According to a press release, the announcements bring total committed investment in the 17.2 sq. kilometers urban regeneration project to over $5.3 billion across five major packages.
Launched in 2019 under Saudi Vision 2030, the development is designed to be the world’s largest city park and aims to boost green space, improve quality of life, and feature over 1 million trees and extensive leisure facilities.
A $3 billion metro-connected district
The largest of the two packages, designated Package 5, will see a consortium led by Kolaghassi Development Co. deliver a residential-led district with a total built-up area exceeding 1 million sq. meters.
It will provide approximately 3,700 residential units, a K–12 school, around 300 hospitality keys and more than 100,000 sq m of Grade A office space alongside a wide variety of retail and dining offerings.
The development is supported by a Saudi-domiciled, Capital Market Authority-regulated fund managed by Mulkia Investment Co. that has attracted leading investors from the Kingdom and across the world.
Kolaghassi Development Co. will lead the project alongside Al Othaim Investment, one of the Kingdom’s real estate players, and RXR, a New York-headquartered real estate investor and operator.
“Securing investment of this scale, supported by international capital and expertise, is an important milestone for King Salman Park,” said George Tanasijevich, CEO of King Salman Park Foundation.
$850 million cultural district package
In a separate announcement, the Foundation confirmed the award of Package 4 to a consortium led by Retal Urban Development Co., with support from a fund managed by SAB Invest.
The project has a total value exceeding $850 million and will host more than 600 residential units, over 140 hotel keys, and almost 50,000 sq m of Grade A office space, alongside curated retail and food and beverage experiences.
“This opportunity reflects the maturity of Saudi Arabia’s real estate investment landscape and our confidence in culture-led, mixed-use urban destinations as a driver of sustainable returns,” said Abdullah Al-Braikan, CEO and founder of Retal Urban Development Co.
Ali Al-Mansour, CEO of SAB Invest, said the fund structure brings together “long-term capital, experienced development partners, and a shared commitment to place-making excellence” while contributing to Riyadh’s cultural vibrancy and the Kingdom’s quality-of-life ambitions under Vision 2030.
