Mercedes-Benz says it’s doing pretty well despite everything going on in the world, Russia is sending less gas to Europe because of everything going on, and NHTSA is probing nearly 2 million vehicles from the Big Three. All that and more in The Morning Shift for Wednesday, July 27, 2022.
1st Gear: Mercedes is Doing Pretty, Pretty, Pretty Good
Mercedes-Benz says they are expecting a significant revenue rise and slightly higher earnings in 2022, despite the world nearly coming to an end on a daily basis. It all has to do with higher-than-ever vehicle prices and the company’s mix of models.
MB said it is raising its outlook after an 8 percent jump in adjusted earnings in the second quarter to $4.97 billion. It had previously said it only expected slightly higher revenues this year and earnings on par with 2021.
Mercedes also says it’s cut its gas consumption by 10 percent in Europe while maintaining full operations. From Automotive News:
The company said it could reduce its gas intake in Germany 50 percent if regional pooling took place. It said it had found a way to operate the paint shop in its Sindelfingen plant without gas in an emergency. The plant builds the high-end electric EQS, S-Class and Maybach models.
A worsening economic climate weighing on consumers are combining with the ongoing struggles to procure enough semiconductors for automakers. Ongoing pandemic lockdowns in China preventing people from buying cars are another threat.
Even so, Mercedes predicted healthy demand for its models during the second half with solid order books indicating demand continues to outstrip available cars.
The company is also working with several microchip-makers directly to make sure the chips keep flowing through the rest of the year.
2nd Gear: Russia is Cutting Gas Flow to Europe
Russia is delivering less gas to Europe as part of further escalations in the energy stand-off between Moscow and the European Union. It’s going to make it a lot harder and costlier for the E.U. to fill up storage ahead of the winter heating season.
Apparently, the capacity of the Nord Stream 1 pipeline, the major delivery route to Europe for Russian gas, has been cut to a fifth of its total capacity. It accounts for about a third of all Russian gas exported to Europe. The drop came just a week after the pipeline restarted following a scheduled 10-day maintenance break. From Reuters:
On Tuesday, EU countries approved a weakened emergency plan to curb gas demand after striking compromise deals to limit cuts for some countries, hoping lower consumption will ease the impact in case Moscow stops supplies altogether.
The plan highlights fears that countries will be unable to meet goals to refill storage and keep their citizens warm during the winter months and that Europe’s fragile economic growth may take another hit if gas will have to be rationed.
Royal Bank of Canada analysts said the plan could help Europe get through the winter provided gas flows from…