Daimler (DAI), the largest luxury carmaker in Europe, expects that the company will deliver a much better performance compared to this year. It is expected that the recovery will be palpable from the fourth quarter of this year. Daimler witnessed a 17.5% fall in global vehicle sales at its premium Mercedes brand in the first seven months of the year, and a 48% dip in sales at its trucks business in the first half. To cope with the slackening demand, Daimler has opted for short working hours at its plants. However, the company is not looking for any forced layoffs in the near future. In the Mercedes-Benz Cars division, Daimler’s focus on the world’s most fuel-efficient and lowest CO2 emission car, smart fortwo – launched 2 years back – gained success in 2008 with a 35% rise in unit sales. The company now plans to ...

Today it was announced that ECOtality, Inc.’s subsidiary, Electric Transportation Engineering Corporation (eTec), a leader in clean electric transportation and storage technologies, received a grant totaling approximately $99.8 million from the U.S. Department of Energy to commence the largest deployment of electric vehicles (EVs) and charging infrastructure in U.S. history.

eTec has partnered with Nissan North America to undertake the massive project. According to the press release, the companies will install electric vehicle charging infrastructure and deploy up to 1,000 Nissan battery electric vehicles in strategic markets in five states: Arizona, California, Oregon, Tennessee, and Washington. It has not been said if success will lead to further opportunity, but the project will certainly put the spotlight on the company and may lead to other contracts.

“By studying lessons learned from electric vehicle operations and the infrastructure supporting these first 5,000 vehicles, the Project enables the streamlined deployment of the next 5,000,000 electric

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Daimler AG (DAI) is benefiting from aggressive efficiency improvement, cost reduction and new model launches. The company is likely to benefit from its focus on the emerging markets of Russia, India and China. Strong earnings give the stock a positive spin.

However, the company is facing many challenges including exchange rate risk, weak auto pricing, rising raw material costs, compliance with CO2 emission reduction standards, as well as a slowing U.S. economy. Sluggish demand has forced the company to bring down production in 2008. DAI has reduced its earnings guidance for the full year 2008. Hence, we rate it a Hold with a six-month target price of $67.

Under the new business plan, the company expects to achieve cost efficiencies through headcount reduction and consolidation of general & administrative (G&A) functions. The G&A costs would be reduced by $1.8 billion per year.

In 2008, the company anticipates higher sales of

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