German carmaking giant Daimler recorded a fourth quarter loss of 1.53 billion Euro (USD 1.93 billion) on February 17, and warned the group faced slumping into the red during the first-quarter of this year. The loss by the maker of the luxury Mercedes-Benz was far worse than expected, and compares with a profit of around 1.7 billion Euro for the same period in 2007, but Daimler chief Dieter Zetsche expressed confidence that the carmaker would be able to make it through the current crisis in the global car industry.

"The Daimler Group is in a relatively strong position to meet the crisis," he said. "We have the opportunity not only to overcome this exceptional situation, but to emerge from it stronger," he said. "We are going to seize this opportunity." But while Zetsche declined to spell out in detail the scale of the possible first-quarter operating loss, he said the company would press on with a big cost-cutting program. The firm has already announced one round of production cuts.

The Stuttgart-based companys fourth-quarter loss helped to drag down earnings for the whole of 2008 with Daimler predicting a tough year ahead. But the group did not provide any details of the outlook, but warned that "further substantial burdens" are likely to undercut the carmakers earnings. Daimlers net profits for 2008 plummeted by 65 percent to 1.41 billion Euro with the result following what the carmaker said was "a very good first half and a difficult second half."

Daimler predicted that global demand for cars could drop by a further 10 percent in 2009, with the company saying its flagship Mercedes Benz marque would also likely be hit by the car industry shakeout. The group also warned that the global economic slowdown would dampen demand for commercial vehicles also in the key growth markets of Asia, Eastern Europe and Latin America. In particular, Daimlers results were hit by a 1.67 billion-Euro write-down caused by its partial pull out from the troubled US carmaker Chrysler, in which it still holds a 19.9 percent stake.