Mercedes-Benz will prioritize sales of top-end and electric vehicles in 2022 and deepen its relationship with chip producers, the automaker said Thursday, seeking more control over its supply chain amid an ongoing semiconductor shortage.
The Mercedes-Benz Cars & Vans division more than doubled its annual adjusted earnings before interest and taxes (Ebit) to 13.9 billion euros ($15.61 billion) from 6.8 billion euros last year even as unit sales fell 5 percent.
Sales of higher-priced vehicles including the Maybach luxury sedans, AMG performance models and larger SUVS helped the company bolster profitability last year despite suffering from production outages.
The company said it expects to sell “slightly more” cars this year.
"Alongside the focus on cost efficiency and supply chain management, three strategic priorities stand out: scaling our electric offensive, accelerating our car software plans and building out our luxury business," CEO Ola Källenius said.
In the fourth quarter, the company reported that revenue fell 7 percent to 43.4 billion euros but earnings rose more than 200 percent to 14.6 billion euros largely helped by a one-time Ebit gain of 9.2 billion euros from the spinoff of the Daimler commercial vehicle business.
Mercedes' adjusted Ebit was up 2 percent in the quarter to 5.2 billion euros.
Mercedes expects profitability at its main cars division to slip this year as the German manufacturer sees more drag from supply chain snarls and a surge in raw materials costs.
The automaker forecasts returns for its cars unit of between 11.5 percent and 13 percent, slightly lower than last year’s 13.1 percent, when it increased production of its most profitable models.
The semiconductor shortage that has plagued manufacturers globally will remain a hurdle even as the crunch eases somewhat, Mercedes said Thursday.
Vehicle prices will continue to rise but “will not fully offset the raw material headwinds which are expected to increase in 2022 compared with last year,” the company said in a statement.
“Net pricing is anticipated to improve further, but it will not fully offset the raw material headwinds which are expected to increase in 2022 compared with last year,” the company said.
The company will propose a dividend of 5 euros per share for the year, a significant jump from last year's 1.35 euros.
About 0.7 euros of this will represent the Daimler Truck dividend, as the truckmaker will not make a separate payout this year, the company said.
Mercedes-Benz, which changed its name from Daimler on February 1 this year, expects revenue to rise slightly this year compared with 2021 as supply chain bottlenecks ease but added it was too soon to predict an end to the global semiconductor shortage.
Bloomberg and Reuters contributed