Gigantic German car maker Daimler (OTCPK:DDAIF) is raising its full-year 2010 earnings target 16% thanks to growth the company is seeing in China and other key emerging markets. Daimler now sees its 2010 earnings before interest and taxes coming in at 7 billion euros ($10 billion), well above the 6.8 billion euros that analysts are expecting.
In particular, the company is geared up to sell 120,000 Mercedes into China this year and expects to raise that sales number to 300,000 by 2015. DDAIY is also investing heavily to boost its Chinese manufacturing and dealer capacity. The theme of luxury vehicles selling into emerging markets is a major one for global investors, and DDAIY -- and the Mercedes brand -- is at the center of it. (Also watch Tata Motors (TTM) with the way it handles the Jaguar brand.)
Meanwhile, about 1 billion euros of the company's earnings will come from its truck unit. Daimler trucks are becoming extremely popular in emerging markets. The company notes Latin America (where truck sales are up 68% on a year-over-year basis), Indonesia (where sales are up 76%) and Eastern Europe (where sales have climbed a spectacular 129%) as key drivers of its success in emerging markets.
Significantly, Western Europe was barely mentioned in discussion of DDAIF's new forecasts, although one developed market -- the United States -- seems to be rediscovering its hunger for high-end Mercedes cars in particular.
Disclosure: No position