NEW YORK (Reuters) -- Daimler plans to offset higher costs for technology to cut carbon dioxide emissions with material cost savings for at least the next few years, Chief Financial Officer Bodo Uebber said.
The cost of fuel-efficiency technology is a challenge for big automakers, particularly as tumbling energy prices encourage consumers to buy larger, less-efficient models.
Ford Motor Co. has warned investors that U.S. consumers may not pay the full costs of technology to cut greenhouse gas emissions because gasoline is cheap.
"Already in 2014, we could offset the burdens in variable cost for all these CO2-related measures with material cost efficiencies," Uebber told reporters in New York on Wednesday. "I think it will be the same in '15 and '16 and '17."
The comments follow Daimler CEO Dieter Zetsche's remarks earlier this month when he said measures taken as part of the automaker’s new Next Stage program would seek to cut costs to help Mercedes achieve a 10 percent margin target in the midterm and offset the structural cost increase stemming in part from the combined 11.2 billion euros in plant and equipment investment budgeted for this year and the next.
Creating more commonality
A key source of cost reduction for the maker of Mercedes-Benz luxury vehicles is creating more commonality among its different car lines, which would allow Daimler to negotiate higher volume with fewer suppliers.
For example, the new Mercedes E class shares components with the C class, Uebber said.
"You have higher volume because you now share components between the C and E and you are talking with the supplier about the whole volume," Uebber said. "That of course gives you leverage and gives you possibilities to decrease your material cost base."
Daimler's flagship Mercedes-Benz division posted a 15 percent sales increase in Europe in January. Uebber said he was "cautiously optimistic" about rebounding market growth for the continent but warned that one month's results were "not a confirmation."
While the overall U.S. market has eclipsed sales from 2008, Western Europe remains about 15 percent lower than levels from that year, the company said.
January sales added up to "a nice number in Europe," Uebber said. "If it goes further in the next five months, I'm happy, and maybe the low fuel price will support it."
Automotive News Europe contributed to this report