DaimlerChrysler said that second-quarter profits had fallen yesterday, although its Chrysler division, which it has sold to a private equity group, performed better than expected. The carmaker, cash-rich after the sale, tried to divert attention with plans for a buyback of 10 per cent of its shares.

The whole of the DaimlerChrysler group reported second-quarter profits of €1.85 billion (£1.25 billion), a drop of 14 per cent, although the fall was in line with market expectations. Chrysler and its financial services operations in North America, meanwhile, reported an increase in profits of 18 per cent to €406 million. The German carmaker, which will rename itself Daimler, is to take a €2.5 billion charge on the $7.4 billion (£3.67 billion) disposal of 80 per cent of Chrysler.

DaimlerChrysler tried to cheer investors with plans for a €7.5 billion share buyback. It said: “This is a logical step in view of the good prospects in all divisions.”

The German group will be renamed in early October. The carmaker had to secure the agreement of Ford, which owns the Daimler name through its Jaguar luxury car division.

Background

• Chrysler drives back to America

• Change of stance clears way for Chrysler deal

• Did Cerberus bite more than it can chew?

• US private equity firm poised to win Chrysler

Dodge Charger

The power goes to Jay Leno's head when he takes the new Dodge Charger police car out for a test spin

• Dodge Nitro

• Dodge Viper

• Dodge Demon

Related Links

• Daimler sells Chrysler to private equity

• Chrysler buyout loan hits skids

The second-quarter figures for Chrysler mark the last time that the American carmaker’s financial performance will have to be made public as the group will escape reporting obligations under private equity ownership.

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