Daimler (DDAIF) said on Friday that it expected a loss of 1.6 billion euros in the second quarter ($ 1.8 billion), a dramatic decline from the 2.6 billion profit. euros ($ 2.9 billion) recorded in the same period of the previous year.
The profits for the year will be significantly lower than the 11.1 billion euros achieved in 2018.
In addition to these factors, Daimler said its full-year performance would be affected by slow product launches and weak growth in the automotive markets.
The Mercedes-Benz van sector is particularly bad. Daimler said Friday that the division would suffer a loss of 2 billion euros ($ 2.3 billion) in the second quarter.
Daimler shares traded at 1.7% in Frankfurt after the announcement.
The profit warning highlights the challenge faced by global automakers. They must invest huge sums in new technologies while the global demand for their products is low.
The European economy is in bad shape and growth is slowing in China, the largest car market in the world. From China Geely (GELYF) said this week that its net profit had probably plunged 40% in the first half.
German rivals Daimler also feel the pain. BMW (BMWYY) profits fell in the first quarter and the group is looking for a new CEO. Volkswagen Group (VLKAF) global vehicle shipments decreased 2.8% in the first six months of the year.
To share this burden, automakers are forming partnerships to develop technologies that include autonomous driving systems and electric vehicle platforms.
Daimler and BMW have partnered to develop carpooling and driverless technology, while Honda (HMC) invested in General Motors & # 39; (GM) autonomous car unit.
Ford and Volkswagen are expected to announce next Friday the next step in their joint efforts to develop the vehicles of the future.