Mercedes-Benz has announced that it expects full-year earnings to be lower than in 2003 following publication of its second quarter results that reveal a slip of 18%.

Operating profit for the period dropped to just below £464m compared with the £569m recorded in the second quarter last year (including Smart). The company blames difficult market conditions for a 4% drop in worldwide unit sales so far this year, but expects new product launches (including C-class, SLK and Smart Forfour from the first half of the year, and A-Class – though not in UK showrooms until spring 2005 – and CLS coupe in the second half) to fully offset the decline by year-end.

Parent DaimlerChrysler, however, reports an overall 225% rise in quarterly operating profit year-on-year to almost £1.4bn, thanks to increased earnings at Chrysler, the CV and Services divisions.

DaimlerChrysler has appointed 53-year-old Eckhard Cordes (pictured left) to succeed Juergen Hubbert as the new head of Mercedes-Benz passenger cars. Cordes, who is currently the head of DaimlerChrysler’s commercial vehicle division, takes on responsibilities from October 1.